ILO targets fraud in digital finance via mobile application

THE International Labour Organization (ILO) said it and its partners are planning a mobile-based financial education pilot program to address risks tied to the rapid expansion of digital financial services in the Philippines.

The initiative, pursued through the United Nations Joint Programme on Inclusive, Competitive and Responsible Digital Philippines, focuses on providing micro-, small-, and medium-sized enterprises (MSMEs) with micro-learning modules to help them navigate digital lending and online fraud, the ILO said in a report.

“The initiative comes as digital financing services continue to expand rapidly across the country. Cashless retail transactions reached 57.4% in 2024, while digital lending application users are estimated at almost 68 million nationwide,” the ILO noted.

“At the same time, the Philippines recorded the second-highest digital fraud rate, according to industry data,” it added.

The ILO said the program aims to deliver short financial education lessons through mobile phones at key decision points, such as loan applications, onboarding and payday periods, when borrowers may be more vulnerable to financial stress and fraud risks.

The modules cover budgeting, responsible borrowing, fraud prevention and digital wage payments.

Hideki Kagohashi, enterprise development specialist with the ILO Country Office for the Philippines, was quoted as saying that financial education works best when it reaches people as decisions are being made.

“By using platforms that entrepreneurs already use every day, we can help make responsible borrowing and digital financial safety more practical and accessible,” he said.

The ILO said the system also incorporates behavioral learning approaches intended to improve participation among MSMEs, informal workers, farmers, fisherfolk and first-time borrowers who may have limited access to formal financial training.

“The aim is to move from one-time information sessions to continuous learning and reinforcement,” Mr. Kagohashi said.

“This approach recognizes that financial decisions happen over time and often under financial pressure,” he added.

The initiative is designed to support the National Strategy for Financial Education, which is scheduled for launch later this year.

According to ILO, this collaboration signals a regulatory shift by the Bangko Sentral ng Pilipinas and the Financial Inclusion Steering Committee to move beyond improving literacy scores toward strengthening actual financial health and resilience.

The ILO’s role in the project is content provider, while BOOST Technologies will manage the digital learning platform. Rural banks, cooperatives and microfinance institutions are expected to integrate the modules into borrower onboarding processes.

The ILO said it is currently identifying institutional partners for pilot implementation and possible nationwide expansion of the program, with plans to expand language accessibility and outreach to vulnerable groups, including returning overseas Filipino workers. — Erika Mae P. Sinaking