Financial Inclusion in ARMM and the proposed

Bangsamoro territory
The report is prepared as part of the Islamic Finance and Financial Inclusion (P153163) project by Nataliya
Mylenko (World Bank). The project received financial support from the Korean Trust Fund for Economic and
Peace-building Transitions.

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1
Introduction
1. Autonomous Region in Muslim Mindanao (ARMM) is the poorest region in the Philippines with
poverty incidence at 55.8% compared to 25.2% nationally1. ARMM is the only region in the Philippines
where more than half of the population is below the poverty level. Average GDP per capita in ARMM at
PhP29,608 (US$705) represents about 25% of national level of PhP117,603 (US$2,800)2 and places ARMM
close to Afghanistan (US$6593) in terms of income per capita level. ARMM ranks below other regions in
terms of most socio-economic indicators reflecting decades of conflict, weak governance and
underinvestment. GDP growth in ARMM over 2009-2013 averaged only 2.7% compared to 6.3% at the
national level. The Mindanao conflict has claimed over 120,000 lives in the past forty years and has
displaced 2 million people with estimated economic loss of US$10 billion between 1975 and 2002. Poor
education and limited economic opportunity has led to widespread underemployment. Poverty and
conflict feed on one another in the region, creating a vicious cycle that leaves young men in particular
vulnerable to radicalization and recruitment by armed groups and terrorist organizations.

2. In October 2012, the government signed a Framework Agreement with the Moro Islamic Liberation
Front (MILF) as part of the peace process in Mindanao. The Agreement lays out a process to establish
the Bangsamoro4, a new autonomous political entity to replace the ARMM and finalize a peace agreement
with the MILF. The ongoing peace and normalization process have created more conducive conditions for
the rehabilitation, reconstruction and development of the Bangsamoro. Improved governance in ARMM
over the last few years has also improved conditions for peace and development. The existing ARMM
constitutes about 90% of the proposed Bangsamoro region in terms of geographical territory and
population.

3. This note reviews the status of financial inclusion and access to financial services in ARMM and
proposed Bangsamoro area using supply and demand side data and offers considerations for improving
financial access in the region. The Philippines Development Plan 2011-2016 identifies financial inclusion
as one of the cross-cutting strategies to achieve inclusive growth. The National Strategy for Financial
Inclusion was launched in July 2015 and provides a focused and systematic approach for implementing
reforms to improve access to financial services in the Philippines. Enabling access to finance is essential
to support growth in ARMM and broader region. Available economic models and growing empirical
evidence also illustrate how financial exclusion can lead to poverty traps and exacerbate inequality5.
Greater financial inclusion and access to finance in ARMM is an important element of a broader
development strategy for the region to strengthen growth and reduce vulnerability.

1
Data for 2012. NEDA.
2
Data for 2013. NEDA
3
2014 data, USD current prices.
4
The area will be determined based on the Bangsamoro Basic Law (BBL) ratification. The potential area for the
inclusion in Bangsamoro as defined in BBL and subject to subsequent plebiscite includes: the present geographical
area of the Autonomous Region in Muslim Mindanao (consisting of Basilan, Lanao del Sur, Maguindanao, Sulu,
Tawi-Tawi, and the City of Marawi); the Municipalities of Baloi, Munai, Nunungan, Pantar, Tagoloan and Tangkal in
the province of Lanao del Norte and all other barangays in the Municipalities of Kabacan, Carmen, Aleosan,
Pigkawayan, Pikit and Midsayap that voted for inclusion in the ARMM during the 2001 plebiscite; the cities of
Cotabato and Isabela.
5
World Bank “Global Financial Development Report 2014: Financial Inclusion”

2
Financial services in ARMM and the proposed Bangsamoro territory: supply side

4. Access to formal financial services in ARMM is practically non-existent. About 93% of cities and
municipalities in ARMM do not have any bank offices or branches – representing the highest percentage
of unbanked regions in the country6. As of September 2015 only 21 bank offices operated in ARMM with
loans outstanding of PhP 1.6 billion (US$35 million) – representing 0.03% of the national total. Resulting
regional credit to GDP ratio is 1% compared to 39% at the national level. Loans outstanding in ARMM
stayed below 2002 levels for nearly a decade, while national and Mindanao credit more than doubled
over the same period (figure 1). In the past three years reflecting recent political normalization, loans
outstanding in ARMM are slowly increasing from the lowest levels recorded in 2006 when total loans
outstanding amounted to PhP 340 million (US$8 million). The few banks that do operate in ARMM focus
on collecting deposits and providing transactional services. As of March 2015 deposits outstanding in
ARMM stood at PhP 8bn (US$170million). Loan to deposit ratio is 16% in ARMM compared to 29% in
Mindanao and 62% national average reflecting a preference for deposit and transactional activities by
banks and limited lending in the region (figure 2).

Figure 1. Lending in ARMM remained low for Figure 2. Banks in ARMM focus on deposit taking
over a decade reflected in low loan to deposit ratio.

3.5
62%
3.0
2.5
2.0
1.5
1.0 29%
0.5
16%
0.0 14%
Dec-02

Dec-09

Dec-14
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08

Dec-10
Dec-11
Dec-12
Dec-13

Sep-15

ARMM Mindanao National ARMM Bangsamoro Mindanao National

Note: value of loans outstanding, normalized to 2002. Note: ratio of outstanding loans to deposits as of
BSP September 2015, %. BSP

5. Financial service providers in the region are concentrated in Cotabato City. Cotabato City financial
sector is equivalent in size to that of ARMM with 19 bank offices and branches and PhP1.5bn (US$33
million) in loan portfolio. Deposits collected by banks in Cotabato city are twice the amount in ARMM at
PhP 14 billion (US$304 million). The loan to deposit ratio in Cotabato is about 10% and is one of the lowest
across all regions in the Philippines reflecting bank preference for deposit and transactional services. At
the same time banking presence in Cotabato City is limited compared to similar size cities in other regions

6 BSP, March 2015

3
of the Philippines. For example, cities that have a similar size population of about 270,000 include Lipa in
Batangas with 69 banking offices, San Pablo in Laguna with 48 and Tagun in Davao del Norte with 33.

6. Combining information for ARMM, Cotabato City and Isabela City provides an estimate for the
financial sector of the proposed Bangsamoro region. Overall 89% of municipalities in Bangsamoro are
unbanked. Outstanding loans stood at PhP3.9bn (US$85 million) and deposits at PhP 28bn (US$608
million) as of September 2013. This combined region remains the smallest in the Philippines compared to
other administrative regions in terms of loans, deposits and the number of bank offices operating in the
area.

7. Non-banks including cooperatives, microfinance organizations and pawnshops are active in the
Bangsamoro area. Unfortunately there is no comprehensive data on non-bank financial services in
ARMM. ARMM Cooperative Development Authority (CDA) reports that around 4,600 cooperatives were
registered in ARMM between 2010 and 2014. This makes ARMM the region with the highest number of
cooperatives in the Philippines. At the same time, the cooperatives largely do not comply with basic
reporting requirements making it difficult to establish how many are active. Recent Successful
Cooperatives Congress in 2015 gathered 136 cooperatives in ARMM. It is difficult to establish how many
functioning cooperatives provide savings and loans functions. Based on financing data available from
Land Bank there are about 200 cooperatives that were able to qualify for loans in ARMM in recent years
for both production and financial intermediation purposes. CDA is working on improving its capacity for
monitoring and supporting cooperatives. Savings and loans services presently offered by cooperatives are
conventional and do not offer Shari’ah compliant financial services7. Two large national microfinance
providers – CARD and ASA Philippines are active in ARMM, the latter now has 18 branches serving more
than 20,000 clients with conventional microfinance in ARMM. There is no statistics on pawnshop activities
in ARMM, but their ubiquity in the streets of cities and towns in the region suggest significant scale of
operations compared to other players.

Financial services in ARMM and the proposed Bangsamoro territory: demand side

8. The first demand-side source of information on the use of financial services in ARMM is a recent
large sample survey covering ARMM area and including questions on financial behavior. The survey was
conducted in 2010 by the World Bank and the World Food Program8 and covered 2,759 individuals in eight
provinces of Central and Western Mindanao and Cotabato City. The survey asked a range of questions on
priorities, livelihood, conflict and social relations, and the use of credit.

9. About 80% of respondents in ARMM provinces respond that they occasionally borrow money to
pay for food (figure 3). And among those who borrow, at least half do so at least twice a month. Figure 1
shows that in most cases the main source of borrowed funds is friends and relatives. Island provinces
provide a stark picture where sizeable groups identify that there is no access – Sulu (44%), Tawi-Tawi
(32%) and Basilan (19%). In none of the ARMM provinces respondents identified a bank as a likely source
of borrowed funds. Even in urban area of the Cotabato city only 9% selected a bank as a possible source
of borrowing. Only 1% or less of respondents in ARMM provinces identified cooperatives as a source of
borrowed funds. The respondents in ARMM provinces were more likely to rely on pawnshops and money
lenders, especially in Tawi Tawi (23%). These statistics align well with the data collected from the supply

7There is an ongoing pilot by Peace and Equity Foundation with 3 cooperatives for Islamic microfinance.
8Bell, Ed and Patrick Vinck (2011) “Violent Conflicts and Displacement in Central Mindanao” http://www-
wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/04/20/000333038_20120420040410/Rendered/PDF/
681780v10WP0P100annexes0Full0report.pdf

4
side and reflect absence of financial institutions in the area and focus on deposit taking for the few banks
that operate in the area.

Figure 3. Sources of borrower funds in Southern Mindanao provinces

% of adults selecting an option, multiple options possible

Sulu 55 44 12

Tawi-Tawi 48 32 23

Basilan 79 19

Lanao del Norte 70 17 6

Maguindanao 84 41

Sultan Kudarat 93 3 19

North Cotabato 87 2 22

Lanao del sur 97 11

Urban (Cotabato) 81 13

0 20 40 60 80 100 120 140 160

Relatives / friends No access Local lender / pawn shop Bank Co-operatives Store

Source: author calculations based on the World Bank and the World Food Program survey, 2010

10. The second data source is a national level Survey on Financial Capability and Inclusion 9 conducted
in 2014. The national level survey covered a sample of 3,000 financially active adults including 90
observations in ARMM and 120 observations in Bangsamoro10. The nationally representative sample
design is such that the ARMM and Bangsamoro sub-samples are not necessarily representative of the
ARMM and Bangsamoro. Respondents were selected in line with national parameters to ensure nation-
wide sample is representative. The small sample size in ARMM and Bangsamoro also poses a constraint.
However, as no other data sources are available on financial behavior in Bangsamoro the analysis of these
data offers a useful indication of the status of financial inclusion and financial capability in Bangsamoro.
Annex 1 provides further details on the sample characteristics.

9
For the Survey report and methodology please see World Bank (2015) “Enhancing Financial Capability and
Inclusion in the Philippines - A Demand-side Assessment”
http://responsiblefinance.worldbank.org/~/media/GIAWB/FL/Documents/Publications/Enhancing-Financial-
Capability-and-Inclusion-in-the-Philippines-FINAL.pdf
10
Combined observations for ARMM, Cotabato City and City of Isabela.

5
Use of financial services

Figure 4. Use of various financial products (% of Figure 5. Use of mobile and traditional services
adults) across regions

informal credit 38 17%

32 NCR 36%
informal savings 34
23 CALABARZON 6%
28%
Investments 17
15 14%
Central Luzon 17%
mobile fs 16
15
Davao 21%
24 17%
insurance(car, prop.) 10
Northern Mindanao 18%
formal credit 10 13%
9
Western Visayas 19%
microcredit 13 8%
8
15 Cagayan Valley 14%
private pension 5 3%

money transfer 15 ARMM 13%

3 2%

formal savings 17 Zamboanga 18%

2 2%
mortgage 4 26%
1 Ilocos 1%
debit card 13
1 Bicol 29%
1%
insurance (health, life) 17
1 20%
SOCCKSARGEN 0%
credit card 5
0
National Bangsamoro Mobile Traditional

Source: author calculations using World Bank Philippines Survey on Financial Capability and Inclusion, 2014

11. Residents in Bangsamoro are generally less likely to report using various financial services than the
rest of the Filipinos (figure 4). Analysis shows that these differences are largely explained by income and
other socio- economic characteristics of individuals and regional effect for Bangsamoro is not statistically
significant. Put it differently, residents in Bangsamoro are not different from those in other regions at a
given level of income, education, occupation, age and other individual characteristics in terms of their use
of most financial products. Low level of use of various financial products is largely due to average lower
level of income. The only products with significant differences between Bangsamoro and those in other
regions after controlling for socio-economic characteristics are the use of money transfer agents, life and
health insurance and formal savings (Table 1). At the same time relatively high share of users of mobile
financial services in ARMM area is consistent with the evidence from other regions and the overall trend
for greater use of mobile financial services in the areas where traditional financial services are limited
(figure 5).

12. Only 21% of adults in Bangsamoro area have access to an account in a formal financial institution
(figure 6). The top line indicator of financial inclusion used in the literature is access to a formal financial

6
institution account. The survey asks the following question to measure access to an account: “Do you,
either by yourself or together with someone else, currently have an account (used to save money, to make
or receive payments, or to receive wages and remittances) at either a bank or credit union (or another
financial institution?” In Bangsamoro 20.5% of respondents answered positively to the question
compared to 42.7% nationally. The difference is explained by individual socio economic characteristics.
Residents in Bangsamoro are generally poorer, younger, and have lower levels of education – all of which
are factors associated with lower level of use of financial services at national level.

Figure 6. Share of adults with access to an account Figure 7. Reasons for not having an account.
in a formal financial institution
42
I do not have enough money 20
to use them 14
I do not need it 18
22
I do not trust them 17
16
21 16
They are too far away 14
I do not have the necessary 10
documents 12
The bank personnel do not 9
treat people 7
They are too expensive 9
9
Bangsamoro National
National Bangsamoro

Source: author calculations using World Bank Philippines Survey on Financial Capability and Inclusion, 2014

13. The reasons for not having an account identified by the residents in Bangsamoro are in line with
answers at national level (figure 7)11. Given the prevalence of cash in the economy and limited presence
of financial institutions unsurprisingly the most common reason for not having an account is “I do not
need it” (22%), followed by “I do not trust financial institutions”(16%), “they are too far away”(14%) and
“I do not have enough money” (14%)12. Interestingly none of the respondents in Bangsamoro identified
the option “Because of religious reasons” as a reason for not having an account. Considering that ARMM
is a majority Muslim area this may appear surprising. There are two possible explanations for this. First,
the question was asked in relation to opening any type of account including transactional (non-interest
account). Second, extensive interviews and consultations in ARMM area indicated that there is generally
a low level of awareness about the nature and options for Sharia finance among population. As all formal
financial services offered in the region are conventional, it is also possible that at least part of the
respondents opted for other explanations such as “I do not need it” or “I do not trust them” instead.

11
No statistically significant differences between Bangsamoro and the non-Bangsamoro sub-samples.
12
None of the respondents in Bangsamoro, and less than 1% at national level identified the following reasons: “I
do not know how to open an account”; “I prefer to use cash”; “Someone else in my family already has an account”;
and
“Because of religious reasons”.

7
Unfortunately the survey did not ask questions for reasons why individuals choose not to borrow from
formal or informal institutions. Subsequent interviews conducted in Bangsamoro area indicate that lack
of alternatives, even among those who would prefer to avail of Shaira financing is a consideration.

Saving and borrowing behavior – stress and fragility

14. Bangsamoro residents are less likely to be able to save and if they do, more likely to keep savings
outside of the formal system (figure 8). In Bangsamoro, 58% of respondents state that they have no
money left over after paying for basic necessities compared to 49% national average. The difference is
largely explained by lower level of income among Bangsamoro residents and other individual socio-
economic characteristics. Among those who do have money left over 98% report savings and 70% say that
they save but do not have an account at a financial institution.

Figure 8. Majority of residents in Bangsamoro do not have money left over after paying for basic
necessities, and those who save do so outside of the formal financial system
Bangsamoro National

Money left No money Money left No money

over, save but left over, 58% over, save but left over, 49%
NO account, NO account,
30% 23%

Money left over, Money left over,

save & have an save & have an
account, 11% account, 25%

Money left over but

do not save, 1% Money left over but do not save, 3%
Source: author calculations using World Bank Philippines Survey on Financial Capability and Inclusion, 2014

15. Residents in Bangsamoro are also more likely to say that they run short of money for food and basic
necessities - 64% compared to 55% average for those in other regions. These differences are explained
by income and other socio economic characteristics of individuals and regional effect for Bangsamoro is
not statistically significant.

16. There are differences in terms of the reasons for running short of money for basic necessities
identified by the respondents in Bangsamoro compared to those in other regions indicating greater
economic stress and vulnerability (figure 9). The most cited reason for running short of money identified
by 55% of respondents in Bangsamoro is “insufficient or unstable income” in line with the national average
of 58%13. At the same time respondents in Bangsamoro are more likely to identify additional reasons
compared to those in other regions. Those in Bangsamoro are more likely to say that they run short of

13
The difference is not statistically significant.

8
money because of looking for work (by 17%), because of increased cost of food and basic necessities (by
15%), because of providing help to others (by 11%), because of failure to plan ahead (by 11%) and because
of overspending (by 9%). These differences are statistically significant after controlling for income and
other socio-economic characteristics of individual respondents. (Table 2). These result could be an
indication of a greater financial stress in Bangsamoro households likely related to economic uncertainty
in this fragile and conflict affected area.

Figure 9. Reasons for running short of money for food and basic necessities

Reasons that are more likely to be identified by

Insufficient income 58% respondents in Bangsamoro
55%

Need to help others 37%

48% Looking for work +17%
Overspend 37%
45%
Increased cost of food and
33% +15%
Unexpected expenses 31% other necessary items

Sickness/family needs 32% Have to provide financial

33% +11%
help to others
High cost of goods 32%
46% Failure to plan
+11%
Looking for work 31% ahead/budget
48%

Business losses 27% Overspending +9%

35%

Do not plan 22%

34%
Note: increase in probability of relyng on a given
source of funds, marginal effects, after controlling
National Bangsamoro
for socio economic characteristics, from estimates
in Table 2.

Source: author calculations using World Bank Philippines Survey on Financial Capability and Inclusion, 2014

17. Bangsamoro residents also rely on a wider range of sources of funds when they run short of money
for food and basic necessities compared to respondents in other regions (figure 10). Most respondents
in and outside of Bangsamoro identify borrowing from a number of sources as the most likely way to get
funds. Beyond borrowing, residents in Bangsamoro were significantly more likely than residents of other
regions to use their savings to cover a shortfall (by 17%), pawn jewelry or other goods (by 15%) and spend
less on essentials such as food and other necessities (by 11%). Moreover, respondents in Bangsamoro are
more likely (by 8%) to report that they borrow to repay debts than residents in other regions. These
differences are significant after controlling for income and other socio-economic characteristics and
present another indication of vulnerability and fragility of the financial lives of Bangsamoro households.
(Table 3)

9
 Figure 10. Sources of funds to cover shortfall when run out of money for food and basic necessities

Bank or moneylender 63% Sources of funds that are more likely to be

77%
48% identified by respondents in Bangsamoro
Cash gift 56%
Buy less-essentials 39%
51%
Borrow-employer 39% Use savings +17%
45%
Pawn 30%
44%
Buy on credit 36%
39%
Pawn jewellery or other
Use savings 24% +15%
37% goods
Buy less-nonessentials 35%
36%
Borrow-friend 40% Spend less on essentials/
33%
necessary items (e.g. +11%
Sell items 22%
32% food)
Borrow-other 22%
25%
Work more 20% Note: increase in probability of relyng on a given
16%
source of funds, marginal effects, after
National Bangsamoro controlling for socio economic characteristics,
from estimates in Table 3.

Source: author calculations using World Bank Philippines Survey on Financial Capability and Inclusion, 2014

18. Residents in Bangsamoro are less likely to plan or track their expenditures and find it more difficult
to control spending (figure 11). Only 35% of respondents in Bangsamoro say they plan for the future
compared to 56% nationally. The share of those reporting planning for the future in ARMM and
Bangsamoro area is lower than in other regions in the Philippines. Detailed analysis shows that those in
Bangsamoro are less likely to plan their expenditures (by 16%), less likely to know how much money they
spent in the past week (by 10%) and more likely to say that they buy thing that are not necessary before
buying basic necessities (by 11%). The results are statistically significant after controlling for socio
economic characteristics. (Table 4).

19. Greater financial stress linked to inability to plan and manage expenses is consistent with recent
research in behavioral economics. Growing research in behavioral economics suggests that poverty and
vulnerability can create “scarcity traps”14. Poverty, and economic vulnerability are shown to be linked to
changes in behavior such as over-borrowing, overspending, inability to plan and manage finances of the
household or “scarcity mindset”. This understanding has important implications for addressing the
problem and design of interventions. For example, providing access to finance and financial education
for farmers can help them better manage cashflow and help reduce debt burden, but if financing for
emergencies or health related expenditures is not addressed, the indebtedness challenge will persist. The

14
Mullainathan, Sendhil and Eldar Shafir (2013) “Scarcity: Why Having too Little Means So Much”, Time Books,
Henry Holt&Company LLC, New York

10
literature on post-conflict assistance and livelihood support is also consistent in stressing the need for the
design of integrated solutions15.

Figure 11. Planning and managing finances.

% of adults planning finances
Buy things that are not
ARMM 37% necessary before food 73%
87%
Western Visayas 38% and basics
Know how much money is
Zamboanga 41% 48%
available for day-to-day
39%
SOCCKSARGEN 41% spending
Northern Mindanao 44% Know how much money 48%
Davao 47% spent in the last week 35%
Cagayan Valley 47%
Plan expenses 56%
Bicol 49% 35%
Ilocos 52%
Central Luzon 57% Borrowed more then can 20%
afford 25%
NCR 62%
CALABARZON 82%
National Bangsamoro

Source: author calculations using World Bank Philippines Survey on Financial Capability and Inclusion, 2014

Financial literacy

20. Only about half of respondents are familiar with the services offered by banks, MFIs and other
formal finance providers, similar to the national responses (figure 12). The respondents in Bangsamoro
area generally do not differ from residents in other regions in terms of their responses on being familiar
with the financial services offered by various institutions. The respondents are most likely to say that they
know about services provided by money changers, money transfer companies and insurance companies,
and less than a half are familiar with banks, non-banks, MFIs and e-money agents. Interestingly,
respondents in Bangsamoro are more likely to be familiar with e-money agents then respondents in other
part of the countries16. This finding is consistent with the trends discussed above on the greater use of
mobile financial services in areas with limited traditional formal financial services.

15
Richard Mallet, Jessica Hagen-Zanker, Rachel Slater and Georgina Sturge (2015) “Surveying livelihoods, service
delivery and governance: baseline evidence from the Democratic Republic of Congo, Nepal, Pakistan, Sri Lanka and
Uganda” Secure Livelihood Research Consortium Working Paper 31, 2015.
16
The result is statistically significant after controlling for socio-economic characteristics. E-money agents are
offices that provide cash-in and cash-out services for mobile financial service providers and e-money issuers.

11
 Figure 12. Familiarity with financial services Figure 13. Financial literacy
offered by various institutions

Money changer 63% Share of adults answering correctly, %

71%

Insurance Co 69% 78%

61% Simple division 78%
Money transfer 65%
61% Simple interest 51%
56%
Bank 56%
48% Inflation 49%
37% calculation 53%
Non-banks 46%
Purpose of 49%
MFI 44% insurance 33%
37%
Compare 31%
Broker 40%
36% bargain 31%

E-money agent 18% Compound 30%

22% interest 25%

National Bangsamoro National Bangsamoro

Source: author calculations using World Bank Philippines Survey on Financial Capability and Inclusion, 2014

21. The level of financial literacy among respondents in Bangsamoro is in line with national averages.
Majority was able to correctly answer questions on simple division (78%), simple interest (56%) and
inflation (53%). At the same time about a third or less were able to correctly answering questions on
compound interest calculation, comparing bargains which required percentage calculation and purpose
of insurance. The question on the purpose of insurance is the only one where the difference between
Bangsamoro residents and national average is statistically significant.

Gender

22. Families in Bangsamoro use a range of strategies to share financial decision responsibilities (figure
14). About a quarter of all married respondents said that the spouses jointly make financial decisions. In
42% of responding households women17 were identified as being in a decision role – and in the remaining
32% - men. Overall, majority of households (65%) make decisions in a shared manner either between
spouses or other members of the family.

23. Women are more likely than men to have access to an account in a formal financial institution and
to use a range of financial services in Bangsamoro (figure 15 and 16). There is a major difference
between men and women in terms of formal account use – 33% of women report having an access to an
account in a formal financial institution compared to 7% of men. There is a substantial gap in the use of
other products as well. The only product used by more men than women is car or property insurance. At

17
A sum of responses by women “Myself”, “Myself and other (but not spouse)” and responses by men identifying
spouse as responsible.

12
the same time there are no significant differences between males and females in terms of their responses
on planning, tracking and managing their finances (figure 17).

Figure 14. Who is mainly responsible for Figure 15. Account access
managing day-to-day money
in a household?
Female:
myslef,
Myslef&spouse,
myself&some
26%
one else, 20%
29%
Naitonal
53%

7%
Bangsamoro
33%
Male: my
Female: my Spouse,
spouse, 22%
13%

Male: myslef,
myself&someone else, 19% Male Female

Figure 16. Women are more likely to use Figure 17. But no difference in terms of behaviour
various finanacial services
Buy things that are not
informal credit 7% necessary before food and 85%
56% 89%
basics
informal savings 18%
27% Know how much money is
available for day-to-day 45%
Investments 6% 33%
24% spending
mobile fs 2%
27% Know how much money 39%
13% spent in the last week 32%
insurance(car, property) 8%

formal credit 1% 34%

16% Plan expenses
36%
microcredit 4%
11%
Borrowed more then can 24%
Male Female afford 25%
Male Female
Source: author calculations using World Bank Philippines Survey on Financial Capability and Inclusion, 2014

13
Considerations for actions to improve financial inclusion in Bangsamoro

ARMM and proposed Bangsamoro area face a significant development challenge. Financial inclusion and
better access to financial services is only one element of the broader development effort envisaged to lift
economic performance of the area. The National Strategy for Financial Inclusion (NSFI) adopted in 2015
creates a focused framework for implementing efforts to boost financial inclusion in the Philippines at a
national level. A range of national policy and regulatory actions, financial education and consumer
protection programs and advocacy initiatives stand to improve prospects for financial inclusion in ARMM
and the proposed Bangsamoro territory. At the same time, considering specific challenges identified in
this analysis, there is also a need for targeted interventions in ARMM and proposed Bangsamoro area.

One possible approach is to consider integrating financially inclusive dimensions in various support
programs delivered in ARMM and proposed Bangsamoro area by the government and development
partners. For example, presently most programs rely on grants to final beneficiaries as a main financing
mechanism. This is appropriate in many cases. At the same time there is a scope to experiment with
alternative financing arrangements including repayable grants, matching grants and credit finance
arrangements in support programs for enterprise development for example. The analysis above shows
that large portion of the ARMM population is relying on informal credit which is more expensive than
alternatives in the formal sector and that formal providers are reluctant to lend. There is a need to
consider integrating market-based mechanisms where appropriate to support the development of a local
financial intermediaries and facilitate a mind-shift among local population and businesses towards
financial sustainability and viability as the region recovers from conflict. The analysis in this paper also
suggests that there is a potential for the use of mobile financial services and other innovations in financial
service delivery to better serve needs of ARMM population. The gender analysis indicates that men are
less likely to use financial services. While this is generally in line with national trends in the Philippines, it
is likely that conflict context in ARMM area is an exacerbating factor and needs to be considered in
interventions design.

The introduction of financial services must be accompanied by a significant effort to improve financial
education and awareness in the region. There is a growing empirical evidence that financial education
and literacy programs are more effective when delivered in conjunction with the use of financial services,
at “teachable moments”. There may be an opportunity to gradually introduce financial education as part
of community development programs, cooperatives support programs and conditional cash transfers
linked to the use of funds, planning expenditures, and gradually relying on a broader set of financial
instruments. The Cooperative Development Authority in ARMM is an important stakeholder for
coordinating and providing support to cooperative sector in ARMM and needs strengthening.

The development of Islamic finance framework and implementation of pilot programs introducing
Shari’ah finance is an important element of financial inclusion effort in ARMM. The Philippines
Development Plan identifies establishment of a framework for Islamic finance as one of its priorities.
National Commission for Muslim Filipinos, Bangko Sentral ng Pilipinas, Amanah Bank and Development
Bank of the Philippines have worked with key stakeholders and legislature to put forward a bill amending
the legal framework for Amanah Bank and establish a legal basis for Islamic banking in the Philippines18.
In addition and in parallel with the development of the broader legal and regulatory framework for Islamic

18
World Bank (2015) “Developing Islamic finance in the Philippines”

14
banking, it is recommended to consider piloting approaches for Shari’ah compliant microfinance. The
implementation of such pilot projects would define product characteristics suitable in the Philippines
context and help validate the feasibility of applying various models19. Moreover, piloting Shari’ah
compliant microfinance in parallel with capacity building and financial education and awareness would
help prepare the ground for broader adoption and integration of market based and social models of
Islamic microfinance.

19
World Bank (2016) “Enhancing Financial Inclusion in Bangsamoro through Islamic Microfinance”

15
Table 1. Use of financial services
Investments Private Insurance General Formal Formal Debit card Money Credit from Mobile Informal Informal
pension Insurance credit savings/acc transfer MFI financial credit savings
products ount services services
Head of household 0.297 0.253 -0.161 0.197 -0.497 0.443 0.969 0.661 -1.05 0.056 0.108 0.063
-0.111 -0.15 -0.337 -0.244 (0.027)* (0.032)* (0.000)** (0.001)** (0.000)** -0.742 -0.416 -0.638
Urban 0.217 0.348 0.397 1.24 -0.379 1.419 1.163 0.673 0.162 -0.27 0.439 -0.07
-0.11 (0.019)* -0.071 (0.000)** (0.027)* (0.000)** (0.000)** (0.000)** -0.37 -0.095 (0.000)** -0.61
Household size -0.013 -0.043 -0.016 0.065 0.028 -0.033 -0.063 -0.032 0.072 -0.019 -0.018 -0.012
-0.675 -0.287 -0.618 (0.021)* -0.531 -0.426 -0.171 -0.397 (0.041)* -0.603 -0.482 -0.641
Male -1.326 0.385 -0.481 -0.152 -0.682 -0.603 -0.655 -1.523 0.342 -0.405 -0.587 -0.25
(0.000)** (0.037)* (0.001)** -0.311 (0.001)** (0.001)** (0.001)** (0.000)** (0.049)* (0.022)* (0.000)** (0.040)*
Education - secondary 0.214 0.486 0.705 0.061 0.354 0.669 0.343 0.126 0.193 -0.022 0.323 0.453
-0.17 (0.002)** (0.000)** -0.669 -0.116 (0.000)** -0.111 -0.438 -0.28 -0.889 (0.004)** (0.000)**
Education - tertiary 0.496 0.596 0.904 0.49 0.539 0.948 0.631 0.367 0.057 0.082 0.032 0.396
(0.005)** (0.001)** (0.000)** (0.006)** (0.021)* (0.000)** (0.003)** -0.054 -0.787 -0.662 -0.829 (0.007)**
Employment - formal 0.384 0.733 0.483 -0.095 0.366 0.436 0.354 0.5 0.612 0.108 0.22 0.259
(0.048)* (0.001)** (0.019)* -0.589 -0.157 (0.029)* -0.136 (0.021)* (0.015)* -0.617 -0.182 -0.096
Employment - informal 0.469 0.1 -0.12 -0.253 0.211 -0.243 -0.165 0.373 0.177 0.463 0.462 0.261
-0.064 -0.726 -0.63 -0.219 -0.408 -0.365 -0.584 -0.173 -0.486 -0.051 (0.011)* -0.143
Self-employed 0.586 0.368 0.34 -0.177 0.439 0.195 0.168 0.519 0.42 0.542 0.626 0.451
(0.001)** (0.035)* (0.033)* -0.219 (0.040)* -0.236 -0.433 (0.006)** (0.026)* (0.003)** (0.000)** (0.000)**
Age < 35 years -0.127 -0.285 -0.629 -0.069 0.005 -0.647 -0.529 -0.559 0.367 -0.592 -0.1 -0.115
-0.356 -0.089 (0.000)** -0.621 -0.976 (0.000)** (0.002)** (0.000)** (0.038)* (0.000)** -0.328 -0.255
Age > 55 years 0.866 0.794 0.539 0.62 0.417 0.434 0.046 0.567 1.439 -0.163 -0.231 0.881
(0.000)** (0.000)** (0.001)** (0.000)** -0.112 (0.012)* -0.843 (0.005)** (0.000)** -0.38 -0.145 (0.000)**
Low 25% by income -2.005 -2.487 -0.454 -1.177 -1.532 -0.885 -1.595 -2.505 -0.739 -2.044 -1.553 -1.13
(0.000)** (0.000)** -0.06 (0.000)** (0.000)** (0.000)** (0.000)** (0.000)** (0.003)** (0.000)** (0.000)** (0.000)**
Low middle 25% by income -0.934 -2.133 -0.778 -0.792 -1.66 -0.98 -1.426 -2.124 -0.587 -0.832 -1.354 -1.163
(0.000)** (0.000)** (0.000)** (0.000)** (0.000)** (0.000)** (0.000)** (0.000)** (0.008)** (0.000)** (0.000)** (0.000)**
Upper middle 25% by income -0.695 -1.216 -0.456 -0.503 -0.67 -0.611 -0.822 -1.146 -0.363 -0.589 -0.838 -0.644
(0.000)** (0.000)** (0.008)** (0.001)** (0.000)** (0.001)** (0.000)** (0.000)** (0.041)* (0.000)** (0.000)** (0.000)**
Bangsamoro 0.384 -0.586 -2.983 -0.318 0.135 -1.29 -1.407 -0.772 -0.487 0.139 0.223 -0.253
-0.094 -0.122 (0.001)** -0.354 -0.69 -0.064 -0.133 (0.047)* -0.508 -0.593 -0.189 -0.157
Constant -1.3 -1.749 -1.714 -1.81 -1.699 -2.332 -2.054 -0.991 -2.679 -0.699 -0.047 -0.506
(0.000)** (0.000)** (0.000)** (0.000)** (0.000)** (0.000)** (0.000)** (0.004)** (0.000)** (0.026)* -0.846 (0.039)*

Observations 3010 3010 3010 3010 3010 3010 3010 3010 3010 3010 3010 3010
Linearized t-statistics in parentheses
* significant at 5%; ** significant at 1%

16
Table 2. Reasons for running short of money for food and basic necessities.
Unexpected
Insufficient Fluctuating Fell sick/look Increase in Have to provide
No work Business losses expences/event Overspending Failure to plan
income income after sick prices help to otehrs
s
Head of household -0.109 0.179 -0.002 -0.377 -0.172 0.366 -0.062 -0.32 -0.067 0.088
-0.501 -0.319 -0.989 (0.022)* -0.319 (0.031)* -0.698 -0.078 -0.666 -0.587
Urban -0.116 -0.264 -0.214 0.051 -0.13 0.069 0.126 0.094 0.14 -0.325
-0.379 -0.116 -0.146 -0.744 -0.341 -0.618 -0.384 -0.524 -0.355 (0.035)*
Household size -0.018 0.008 -0.001 -0.023 -0.03 -0.07 -0.008 0.004 -0.004 -0.008
-0.517 -0.82 -0.975 -0.465 -0.314 (0.044)* -0.788 -0.907 -0.905 -0.823
Male 0.06 -0.13 -0.017 0.35 0.27 -0.395 0.099 0.319 0.064 -0.165
-0.671 -0.423 -0.918 (0.039)* -0.087 (0.006)** -0.513 (0.038)* -0.668 -0.307
Education - secondary 0.124 0.053 -0.061 -0.043 -0.235 -0.056 -0.182 -0.171 -0.244 -0.114
-0.404 -0.785 -0.656 -0.778 -0.093 -0.721 -0.237 -0.247 -0.076 -0.5
Education - tertiary 0.324 -0.044 0.129 -0.253 -0.636 0.123 0.006 0.018 -0.254 -0.105
(0.038)* -0.836 -0.439 -0.177 (0.001)** -0.496 -0.973 -0.923 -0.15 -0.569
Employment - formal -0.076 -0.499 -0.265 0.059 0.375 0.157 -0.007 -0.328 -0.039 -0.041
-0.678 (0.038)* -0.172 -0.799 -0.074 -0.429 -0.973 -0.121 -0.847 -0.861
Employment - informal -0.16 0.223 -0.201 0.099 0.134 -0.062 0.097 -0.027 -0.162 0.186
-0.485 -0.394 -0.411 -0.691 -0.599 -0.779 -0.657 -0.913 -0.517 -0.482
Self-employed -0.095 0.254 -0.325 0.049 0.039 -0.032 -0.02 -0.238 0.145 -0.149
-0.551 -0.181 -0.053 -0.793 -0.833 -0.844 -0.908 -0.164 -0.357 -0.441
Age < 35 years -0.131 -0.109 0.126 0.198 0.166 0.024 0.018 0.142 0.209 0.079
-0.272 -0.469 -0.345 -0.162 -0.168 -0.853 -0.897 -0.266 -0.103 -0.592
Age > 55 years 0.031 0.118 -0.428 0.173 -0.04 -0.335 -0.191 -0.205 -0.285 -0.368
-0.861 -0.61 (0.043)* -0.42 -0.835 -0.138 -0.325 -0.293 -0.165 -0.107
Low 25% by income 0.151 0.546 -0.565 -0.556 0.147 -0.49 -0.069 -0.467 -0.795 -0.523
-0.379 (0.016)* (0.010)** (0.016)* -0.4 (0.013)* -0.736 (0.031)* (0.001)** (0.034)*
Low middle 25% by income 0.115 0.45 -0.171 -0.303 0.026 -0.155 0.018 -0.348 -0.318 -0.269
-0.519 (0.050)* -0.367 -0.13 -0.89 -0.391 -0.932 -0.055 -0.09 -0.187
Upper middle 25% by income -0.058 0.079 -0.053 -0.038 -0.237 0.146 0.2 0.058 -0.008 -0.089
-0.739 -0.716 -0.787 -0.832 -0.208 -0.44 -0.295 -0.739 -0.965 -0.675
Bangsamoro 0.124 -0.758 0.76 0.427 -0.094 -0.037 0.622 0.475 0.369 0.547
-0.741 (0.005)** (0.014)* -0.107 -0.713 -0.846 (0.002)** -0.054 (0.046)* (0.007)**
Constant -0.061 -1.554 -0.34 -0.819 -0.505 -0.183 -0.756 -0.254 -0.268 -0.675
-0.833 (0.000)** -0.25 (0.013)* -0.086 -0.582 (0.021)* -0.426 -0.37 -0.069

Observations 1628 1628 1628 1628 1628 1628 1628 1628 1628 1628
Linearized t-statistics in parentheses
* significant at 5%; ** significant at 1%

17
Table 3. Sources for funds to cover shortfall when run out of money for food and basic necessities
Borrow - Cash gifts Borrow - Borrow - Buy on credit Pawn Borrow - Use Find extra Sell Spend less Spend less Borrow to
family employer bank or jewellery other savings work something on on non- repay debt
&friends moneylend sources essentials essentials
Head of household 0.003 -0.208 -0.3 -0.46er -0.035 0.019 -0.001 0.165 -0.08 -0.48 -0.237 -0.092 -0.388
-0.985 -0.156 (0.050)* (0.013)* -0.828 -0.907 -0.997 -0.417 -0.65 (0.007)** -0.165 -0.539 (0.003)**
Urban 0.066 -0.1 -0.173 -0.146 -0.156 -0.121 -0.121 0.165 0.04 0.155 -0.357 -0.098 -0.204
-0.632 -0.507 -0.25 -0.506 -0.307 -0.422 -0.387 -0.308 -0.769 -0.372 (0.008)** -0.487 -0.16
Household size 0 0.006 -0.008 0.004 -0.006 0.008 -0.035 0.035 -0.002 -0.001 -0.067 0.093 0.029
-0.995 -0.845 -0.788 -0.913 -0.837 -0.821 -0.266 -0.338 -0.946 -0.984 (0.025)* (0.004)** -0.258
Male -0.035 0.456 0.024 0.422 0.093 0.125 -0.013 -0.181 0.332 0.467 0.057 0.219 0.383
-0.81 (0.002)** -0.856 (0.012)* -0.538 -0.415 -0.938 -0.261 -0.055 (0.004)** -0.72 -0.113 (0.001)**
Education - secondary -0.074 -0.25 -0.239 -0.107 0.108 0.077 -0.153 -0.112 -0.43 -0.232 -0.177 -0.145 -0.175
-0.569 -0.096 -0.1 -0.52 -0.427 -0.597 -0.331 -0.493 (0.007)** -0.149 -0.279 -0.346 -0.125
Education - tertiary -0.341 -0.134 -0.146 0.1 0.126 0.129 0.022 0.506 -0.124 -0.239 -0.016 -0.091 -0.468
(0.036)* -0.459 -0.409 -0.603 -0.469 -0.422 -0.906 (0.007)** -0.482 -0.19 -0.93 -0.595 (0.000)**
Employment - formal -0.068 -0.392 0.011 0.146 0.256 -0.147 0.249 0.299 -0.207 0.17 -0.502 0.03 -0.106
-0.702 (0.034)* -0.956 -0.486 -0.219 -0.529 -0.321 -0.19 -0.374 -0.45 (0.015)* -0.878 -0.473
Employment - informal -0.55 0.284 0.004 0.141 -0.14 0.04 -0.203 0.146 0.184 -0.235 -0.009 0.166 -0.194
(0.013)* -0.256 -0.987 -0.572 -0.577 -0.861 -0.45 -0.588 -0.492 -0.386 -0.967 -0.486 -0.286
Self-employed -0.07 -0.196 0.123 0.23 0.043 -0.1 -0.075 -0.038 0.059 0.004 -0.248 -0.054 -0.182
-0.632 -0.171 -0.444 -0.167 -0.787 -0.588 -0.671 -0.822 -0.751 -0.984 -0.131 -0.726 -0.141
Age < 35 years -0.18 0.319 0.323 0.125 0.251 0.132 -0.069 -0.012 0.008 0.067 0.066 0.151 0.225
-0.173 (0.012)* (0.009)** -0.34 (0.031)* -0.36 -0.654 -0.937 -0.958 -0.634 -0.561 -0.269 (0.030)*
Age > 55 years -0.27 0.061 0.109 -0.236 0.182 -0.033 -0.063 0.336 -0.134 -0.178 -0.426 -0.298 -0.36
-0.136 -0.754 -0.551 -0.2 -0.33 -0.876 -0.779 -0.121 -0.562 -0.445 (0.037)* -0.184 (0.008)**
Low 25% by income 0.123 -0.516 -0.647 -0.813 -0.069 -0.646 0.158 -0.088 0.066 -0.376 -0.739 -0.304 -0.073
-0.519 (0.006)** (0.002)** (0.000)** -0.711 (0.002)** -0.457 -0.687 -0.771 -0.103 (0.000)** -0.15 -0.64
Low middle 25% by income -0.101 -0.163 -0.241 -0.153 -0.054 -0.265 0.575 -0.427 0.397 -0.163 -0.393 0.189 0.341
-0.576 -0.349 -0.203 -0.408 -0.77 -0.158 (0.005)** (0.034)* -0.061 -0.439 (0.029)* -0.316 (0.010)*
Upper middle 25% by income -0.073 0.104 -0.072 0.229 0.046 -0.074 0.462 -0.292 0.091 -0.21 -0.107 0.008 0.368
-0.669 -0.564 -0.705 -0.257 -0.786 -0.671 (0.022)* -0.197 -0.695 -0.309 -0.55 -0.965 (0.006)**
Bangsamoro -0.284 0.221 0.119 0.657 0.088 0.659 0.078 0.807 -0.456 0.574 0.466 -0.07 0.394
-0.455 -0.326 -0.731 -0.161 -0.757 (0.002)** -0.843 (0.001)** -0.052 -0.176 (0.014)* -0.789 -0.051
Constant -0.048 0.066 -0.055 0.613 -0.775 -0.749 -1.219 -1.425 -1.448 -1.083 0.708 -1.055 0.447
-0.862 -0.818 -0.858 -0.055 (0.010)* (0.009)** (0.000)** (0.000)** (0.000)** (0.003)** (0.026)* (0.001)** -0.065

Observations 1628 1628 1628 1628 1628 1628 1628 1628 1628 1628 1628 1628 3010
Linearized t-statistics in parentheses
* significant at 5%; ** significant at 1%

18
Table 4. Planning and managing finances
Money left Short of money Plan Borrow for Borrow to Know budget Know Borrow more Buy items that are
after basics for basics expenses necessities repay debt expenses than can afford not necessary
before necessities
Head of household 0.117 -0.148 0.523 -0.163 -0.388 0.454 0.51 -0.162 -0.425
-0.334 -0.255 (0.000)** -0.191 (0.003)** (0.000)** (0.000)** -0.42 (0.003)**
Urban 0.48 -0.256 0.093 -0.252 -0.204 -0.043 -0.04 -0.002 -0.125
(0.000)** (0.011)* -0.486 (0.013)* -0.16 -0.773 -0.779 -0.992 -0.495
Household size -0.006 0.028 0.019 0.02 0.029 0 0.009 -0.015 -0.012
-0.79 -0.253 -0.461 -0.385 -0.258 -0.999 -0.688 -0.688 -0.634
Male -0.12 0.281 -0.573 0.334 0.383 -0.261 -0.302 0.048 0.463
-0.259 (0.015)* (0.000)** (0.003)** (0.001)** (0.019)* (0.006)** -0.78 (0.000)**
Education - secondary 0.196 -0.012 0.268 -0.055 -0.175 0.156 0.213 -0.228 -0.387
-0.083 -0.908 (0.030)* -0.603 -0.125 -0.193 -0.06 -0.197 (0.007)**
Education - tertiary 0.586 -0.354 0.226 -0.386 -0.468 0.367 0.363 0.037 -0.593
(0.000)** (0.003)** -0.118 (0.001)** (0.000)** (0.007)** (0.006)** -0.845 (0.000)**
Employment - formal 0.396 -0.059 0.14 -0.092 -0.106 -0.145 -0.196 -0.081 0.011
(0.010)** -0.715 -0.332 -0.571 -0.473 -0.323 -0.17 -0.734 -0.947
Employment - informal 0.353 -0.232 -0.173 -0.298 -0.194 -0.528 -0.366 0.204 0.059
(0.037)* -0.221 -0.361 -0.107 -0.286 (0.002)** (0.037)* -0.404 -0.772
Self-employed 0.366 -0.214 0.144 -0.238 -0.182 -0.004 -0.088 -0.073 -0.01
(0.003)** -0.093 -0.248 -0.056 -0.141 -0.974 -0.428 -0.703 -0.942
Age < 35 years -0.14 0.146 -0.212 0.189 0.225 -0.021 0.019 -0.077 0.353
-0.171 -0.159 (0.036)* -0.062 (0.030)* -0.846 -0.856 -0.646 (0.001)**
Age > 55 years 0.558 -0.364 0.475 -0.418 -0.36 0.335 0.317 -0.062 -0.123
(0.000)** (0.006)** (0.000)** (0.003)** (0.008)** (0.016)* (0.019)* -0.781 -0.383
Low 25% by income -0.932 1.103 -0.392 0.85 -0.073 0.055 0.178 -0.179 -0.292
(0.000)** (0.000)** (0.012)* (0.000)** -0.64 -0.743 -0.266 -0.37 -0.095
Low middle 25% by income -0.736 0.479 -0.533 0.421 0.341 -0.366 -0.307 0.407 0.364
(0.000)** (0.000)** (0.000)** (0.001)** (0.010)* (0.006)** (0.021)* (0.048)* (0.015)*
Upper middle 25% by income -0.432 0.484 -0.585 0.451 0.368 -0.446 -0.327 0.367 0.39
(0.001)** (0.000)** (0.000)** (0.000)** (0.006)** (0.000)** (0.010)* -0.092 (0.007)**
Bangsamoro 0.113 0.096 -0.664 0.212 0.394 -0.214 -0.403 0.191 0.688
-0.667 -0.776 (0.006)** -0.521 -0.051 -0.284 (0.027)* -0.592 (0.019)*
Constant -0.254 -0.114 0.345 -0.088 0.447 -0.054 -0.182 -1.262 1.194
-0.268 -0.588 -0.167 -0.681 -0.065 -0.815 -0.434 (0.000)** (0.000)**

Observations 3010 3010 3010 3010 3010 3010 3010 1553 3010
Linearized t-statistics in parentheses
* significant at 5%; ** significant at 1%

19
Annex 1. Philippines Financial Capability and Inclusion survey. Sample statistics.

The data used in the analysis for this report is drawn from the survey on Financial Capability and Inclusion
in the Philippines completed in 2014.20 The survey subsample used for the analysis of Bangsamoro area
includes 15 observations from each of the 8 barangays in the following cities and municipalities: Buldon,
Paglat, Parang, South Upi in Maguindanao; city of Lamitan, city of Isabela in Basilan; Mulondo in Lanao del
Sur; and Cotabato City.

The Bangsamoro sub-sample characteristics are broadly in line with available regional statistics. The
sample is composed of 51% females and 49% males. Respondents in Bangsamoro are generally younger,
have less formal education, more likely to be working and employed in informal sector or self-employed,
with lower level of income compared to national sample of respondents. Sample characteristics in terms
of education (figure 2b) are matching closely with ARMM reported statistics as of 201521 - 13% with no
grade completed, 46% with elementary school, 29% with secondary education and 12% with college
education. ARMM official statistics results on type of employment as of January 2015 are close to those
in the sample (figure 2c) – 17% wage employment, 54% self-employed, 28.6% work in own family-
operated farm or business without pay.22 Average monthly income in the sample of PhP 13,370 is broadly
in line with reported official monthly income of PhP10,75023 in 2012. Overall, sample demographics are
broadly consistent with the Bangsamoro population characteristics in terms of age, education, occupation
and income.

20
For the Survey report and methodology please see World Bank (2015) “Enhancing Financial Capability and
Inclusion in the Philippines - A Demand-side Assessment”
21
Philippines statistic Authority, January 2015 Labor Force Statistical Tables TABLE 4B Percent Distribution of Employed Persons by
Highest Grade Completed, by Region and Sex: January 2015
https://psa.gov.ph/sites/default/files/attachments/hsd/article/TABLE%204B%20%20Percent%20%20Distribution%20of%20Employed%20Persons%20by%20Hig
hest%20Grade%20Completed%2C%20by%20Region%20and%20Sex%20January%202015.pdf
22
Philippines statistic Authority, January 2015 Labor Force Statistical Tables. TABLE 7B Percent Distribution of Employed Persons
by Sex, by Region and Class of Worker: January 2015
https://psa.gov.ph/sites/default/files/attachments/hsd/article/TABLE%207B%20%20Percent%20Distribution%20of
%20Employed%20Persons%20by%20Sex%2C%20by%20Region%20and%20Class%20of%20Worker%20January%20
2015.pdf
23
Computed from annual average, latest available data for 2012 https://psa.gov.ph/content/quickstat-
autonomous-region-muslim-mindanao-%E2%80%93-may-2014

20
 Figure A1. Sample characteristics

(a) Age categories (b) Formal education

>55 14 college and higher 29

11 18

36-55 38 school & vocational 43

28 29

26 - 35 27 elementary 25
31 41

<25 21 no school 2
31 13

National Bangsamoro National Bangsamoro

(c) Employment categories (d) Monthly household income

not work 20 More than PhP 50,000 5

13 1

self employed 51 PhP 20,000-50,000 32

57 9

informal 11 PhP 10,000-20,000 35

16 58

formal 18 Less than Php 10,000 28

15 33

National Bangsamoro National Bangsamoro

21