Bangko Sentral ng Pilipinas (BSP) has sounded an alarm over one of the most persistent and consequential gaps in the country’s financial inclusion landscape: the extremely low insurance penetration rate.
According to BSP Deputy Governor Bernadette Romulo-Puyat in a recent media event, only 14 out of every 100 Filipinos have any form of insurance, a figure that emphasizes the vulnerability of millions of households to financial shocks, medical emergencies, climate‑related disasters, and income disruptions.
The BSP is now pushing banks to play a more active role in expanding access to insurance products, particularly microinsurance and affordable protection plans that can be bundled with deposit accounts, loans, and digital financial services.
This renewed push comes at a time when the Philippines faces rising climate risks, increasing healthcare costs, and widening income volatility; conditions that make insurance not just a financial product but a critical tool for resilience.
The central bank’s strategy aligns with its broader financial inclusion action plan under the National Strategy for Financial Inclusion (NSFI) 2022–2028, which highlights risk protection as a core pillar of financial health.
While digital payments and bank account ownership have grown significantly, insurance uptake has lagged behind, leaving millions exposed to financial shocks.
State of Financial Inclusion in the Country
BSP emphasized the urgency of expanding insurance access, noting that only 14 percent of Filipinos are insured, far below regional peers and global averages.
The BSP sees banks as critical distribution channels for insurance products, given their reach, trust, and regulatory oversight.
Romulo-Puyat highlighted that banks can integrate insurance offerings into their existing financial services, such as savings accounts, loans, and digital banking platforms, to make protection more accessible and affordable.
Latest financial inclusion data from the central bank shows that while account ownership and digital payments have grown, risk protection remains one of the weakest areas of financial inclusion.
Moreover, BSP’s Consumer Finance and Inclusion Survey (CFIS) indicates that Filipino households increasingly rely on shared financial access, with 85 percent of households having at least one financial account in 2025, up from 74 percent in 2024.
However, insurance uptake has not kept pace, suggesting that financial inclusion gains have not translated into adequate protection.
BSP’s Financial Inclusion Dashboard also shows that the country has 134 insurance providers, including life insurers, non‑life insurers, microinsurance providers, and mutual benefit associations. Despite this relatively large provider base, penetration remains low, indicating structural barriers in distribution, affordability, and consumer awareness.
Insurance Penetration in the Philippines is Low
Philippines’ low insurance penetration is driven by structural and behavioral factors. These factors create a cycle of vulnerability: households without insurance face higher financial stress during emergencies, leading to debt, asset depletion, and long‑term instability.
Above all, insurance is often perceived as expensive or unnecessary, especially among low‑income households that prioritize immediate needs over long‑term protection.
Traditional insurance distribution also relies heavily on agents and physical branches, limiting reach in rural and underserved areas.
Financial literacy gaps persist—while 74 percent of Filipinos correctly answered at least half of financial literacy questions in 2025, many still lack understanding of risk protection and insurance benefits.
Moreover, informal risk‑sharing practices remain common. Many households rely on family support, community networks, or loans during emergencies, reducing perceived need for formal insurance.
Climate‑related disasters and health emergencies often expose gaps in coverage, but uptake remains slow due to distrust, complexity of products, and lack of accessible microinsurance options.
BSP’s Strategy: Banks as Insurance Gateways
The BSP believes banks are uniquely positioned to close the protection gap. Banks have extensive branch networks, digital platforms, and established customer relationships. They also operate under strict regulatory oversight, making them trusted channels for financial products.
The BSP’s strategy involves encouraging banks to:
- integrate microinsurance into deposit accounts
- offer bundled insurance with loans
- partner with insurers to distribute affordable protection plans
- leverage digital banking apps to simplify enrollment
- use cash agents and e‑money agents to reach remote communities
The number of cash agents grew by 242 percent from 2019 to 2020, and e‑money agents grew by 134 percent, dramatically expanding distribution points for financial services. These networks can be leveraged to distribute microinsurance products more widely.
Digital banks also play a key role. The number of digital banks increased from four to six between 2022 and 2023, reflecting strong growth in digital financial infrastructure. Digital banks can integrate insurance offerings directly into mobile apps, reducing friction and improving accessibility.
Microinsurance as a Scalable Solution for Low‑Income Households
Microinsurance providers and mutual benefit associations already serve millions of low‑income Filipinos, offering affordable coverage for life, health, property, and livelihood risks.
The BSP’s dashboard shows 50 microinsurance providers operating nationwide, depicting how microinsurance is central to the BSP’s strategy.
Microinsurance products typically cost less than traditional insurance and offer simplified claims processes. They are designed for low‑income households, informal workers, farmers, and microentrepreneurs.
With microinsurance integrated into banking channels, the BSP aims to scale distribution and reduce barriers to entry.
Banks can also offer parametric microinsurance for climate‑related risks, providing automatic payouts based on predefined triggers such as typhoon intensity or rainfall levels. This is particularly relevant for the Philippines, one of the world’s most disaster‑prone countries.
Why Insurance Matters for Financial Stability and Resilience
Insurance is a critical component of financial resilience. It protects households from catastrophic expenses, reduces reliance on debt, and prevents long‑term financial decline.
Economy-wide, insurances support stability by reducing systemic risks associated with disasters, health crises, and income shocks.
BSP’s banking system updates show that household loans grew significantly in 2025, driven by strong consumer spending and demand for credit.
Without insurance, households relying on credit may face higher default risks during emergencies. Expanding insurance access can therefore strengthen both household resilience and banking system stability.
Insurance also supports micro, small, and medium enterprises (MSMEs), which often struggle to recover from disasters or economic shocks. Microinsurance for MSMEs can protect assets, inventory, and livelihoods, supporting long‑term economic growth.
DOPAY, as a BSP‑licensed e‑wallet and crypto wallet, stands ready to promote financial integrity, transparency, and consumer protection.
For our beloved OFWs, with DOPAY, you can be assured that you can send money to the Philippines safely and at low cost.
Simply top-up your DOPAY wallet from anywhere in the world and send that to someone in the Philippines through DOPAY, and they will receive pesos in their DOPAY wallet; all within the app!
With DOPAY’s crypto wallet, you can gain crypto rewards for every trade under our Trade & Earn program. Not just that, with DOPAY’s Refer & Earn program, Filipinos can unlock new doors for earning possibilities with every successful referral.
Download the DOPAY app today!
