THE Philippines was named the best country in Asia and the third-best in the world in terms of promoting the microfinancing industry.

This, officials said, was in recognition of public- and private-sector efforts to support micro-entrepreneurs.

In a survey covering 55 countries, the Economic Intelligence Unit (EIU) said the Philippines got the third-highest score of 68.4 points in terms of promoting an enabling environment for microfinance businesses.

?The practice of providing small sums to low-income entrepreneurs?known as microfinance?has never been more popular nor more important,? EIU said in the study.

Peru got the highest score of 73.8 points, while Bolivia got the second-highest score of 71.7 points.

The 55 countries were ranked based on three categories: regulatory framework, institutional development, and investment climate.

The ?regulatory framework? category had to do with the adoption of laws and regulations that help promote microfinance businesses. The Philippines was ranked No. 1 in this category, garnering the highest score of 87.5 points.

EIU, the business information arm of the Economic Group (publisher of The Economist magazine), credited the Philippines for the enactment of laws that made it easier for micro entrepreneurs to access loans.

EIU cited the General Banking Law of 2000, which includes provisions that prompted banks to allocate portions of their investment funds for lending to micro, small and medium-sized entrepreneurs.

The establishment of microfinance institutions, which extends credit to micro and small businessmen, are also widely encouraged in the Philippines, EIU said, noting the relaxed regulatory rules that apply to them.

?Microfinance institutions are not burdened with excessive documentation requirements or capital adequacy ratio requirements, and do not face unfair competition from subsidized public credit institutions,? EIU said in the study.

The ?institutional development? category dealt with the progress of microfinance industry in a country, as manifested by the level of competition and the availability of microfinance services, among others. The Philippines ranked sixth in this category, being assigned a score of 58.3 points.

According to the EIU, there is a considerable number of financial institutions in the Philippines that extend loans and other financial services to micro-entrepreneurs.

?The BSP (Bangko Sentral ng Pilipinas) is also reviewing new policy initiatives to further develop microfinance provisions, including those on micro-insurance, branchless banking, and the use of mobile phones to make loan payments, deposits and withdrawals,? EIU said.

In the ?investment climate? category, the Philippines ranked No. 17, getting a score of 50.6. This category was about the availability of a favorable capital market and judicial system, and the stability of the political environment.

BSP Deputy Governor Nestor Espenilla Jr. said the high rank of the Philippines in the EIU?s survey was a result of conscious efforts over the years to provide an environment that would help support micro enterprises in the country.

Being a developing nation, the Philippines relies mostly on micro, small and medium enterprises for the development of its overall economy.

Over 90 percent of businesses in the country are in the MSME sector, officials said.

The other countries that landed in the Top 10 were India (62.1), Ghana (60.9), Ecuador (59.7), Nicaragua (58.7), Colombia (58.6), El Salvador (57.5), and Uganda (57.5).