As the world takes cognizance of the use of biometrics in fintech and regtech, the Philippines is bringing biometrics to fore of its growth trajectory.
By Sangeeta Deogawanka
Since the Philippines gained independence in 1946, the country has witnessed decades of political instability. Successive governments were rooted in corruption, while illegal immigration and separatist claims in the South created an unstable democracy. Poverty, unemployment and crime still dominate the public conversation, however, the political will of recent establishments has brought about a change in perception.
The country has climbed 12 places in the global corruption index. The government is strengthening anti-corruption agencies, the justice system and information laws. The Philippines has recognised that economic growth and development hinges on a strong society.
The Philippines strengthened society through biometric adoption
A successful and strong society means giving the right citizens access to government benefits and stemming financial bleeding through systematic abuse and corruption. With this in mind, in 2012, the Philippines Social Security System rolled out its biometric identification system to authenticate welfare recipients— families living below the poverty line with children under 17-years-old. This was followed by the Philippines Government Service Insurance Scheme adopting fingerprint authentication to expedite pension disbursements in the 750 kiosks across remote regions and islands.
The success of biometrics in these schemes resulted in the Philippine National Police in Manila implementing the Automated Fingerprint Identification System (AFIS). This allowed the authorities to build a criminal database much like the FBI’s Next Generation Identification system. In 2016, the Philippines’ Commission on Elections (COMELEC) started to employ biometrics in the country’s voter registration process to strengthen Filipino democracy.
The Bureau of Immigration (BI) also employed biometrics in the fight against illegal immigration and the use of fraudulent travel documents. The scheme links biometric screening to Interpol databases, to prevent terrorists and criminals using the Philippines as a safe haven. Facial-recognition drones are also playing a role in the government’s fight against terrorism.
In the private sector, Citi Bank launched a voice-based verification system in 2016 to tackle financial fraud. A year later, the Union Bank of the Philippines launched the New EON, a digital banking platform, with capabilities of mobile biometric authentication using facial and fingerprint authentication.
The latest biometric scheme to be given the go-ahead is a Unique Identifier System that makes use of biometrics for a pan-nation ID. This revolutionary scheme assigns Filipinos with a Common Reference Number (CRN) that is linked to biographic and biometric information.
With this, the government is able to store all its information on an individual in a single platform, including eligibility for social welfare schemes and their exercise of voting rights. Filipinos will have a national identity card which grants access to everything from government services to bank accounts and jobs. The process of citizen identity digitisation is expected to take a couple of years.
Why is Philippines widening its biometric footprint?
The 2012 rollout of a fingerprint-authenticated welfare scheme was met with overwhelming success. Intermediaries could no longer steal welfare money as the biometric system had become tamper-proof and was directly linked to the bank accounts of beneficiaries.
Yet, there are voices protesting the risks of biometric abuse. Fear is expressed that so much personal data in the hands of the government can be potentially misused. Cybercrime and data breaches are also a cause of concern.
Do the pros of a national biometric ID outweigh the cons?
As an archipelagic country, the Philippines is prone to recurrent natural disasters. Its populace is also spread out across 2000 islands. In this socio-geographic landscape, administering government aid and welfare is a logistical nightmare.
In the aftermath of typhoons and flooding, identifying aid recipients and ensuring everyone gets access to assistance is complicated by lost identity cards. Biometric records eliminate the disruption to aid distribution caused by lost physical records. In a country like the Philippines, this is hugely significant.
In such a scenario, a biometrics-based ID becomes a robust system to root out corruption, do away with illegal claims of social security benefits, and prevent misuse of non-digital IDs by illegal immigrants and home-grown terrorists.
What does the future hold?
In an era where global money laundering and terrorist financing concerns continue to grow, embracing biometric identification arms the government with a powerful new weapon in combatting terror and preventing terrorist financing.
The KYC (Know Your Customer) initiative, which uses biometric data to verify customers’ identities will not only foster a healthy growth of digital payments in Philippines, as we have seen over the past year; but will also prevent financial fraud. Faster and simpler customer onboarding with this foolproof KYC will boost economic growth and bring it on par with its ASEAN neighbours in the region with seamless cross-border trade.
When the lower strata of a society are empowered through the efficient distribution of aid and welfare and progress at tackling corruption, the face of an economy is bound the change. This is happening in Philippines. In fact, as the Philippines becomes a case study of biometrics adoption for economic and social growth, we can expect to see other countries in Southeast Asia adopting the same model.