The central bank intends to continue leading the charge for greater innovation and adoption of technology in the local financial system, especially given the impetus provided by the coronavirus pandemic, its head said on Wednesday (Nov. 3).
Speaking at a recent online forum, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the regulator will remain at the forefront of broad initiatives to foster a stronger and more technologically-advanced Philippine economy.
“Technology aids exponential growth in output,” he told participants of the Standard Chartered Sovereign Investor Forum. “In finance, it makes transactions easier and faster which speeds up income generation.”
A key BSP initiative in this regard is the implementation of the Digital Payment Transformation Roadmap, which was launched in 2020. It aims to transform the Philippines into a cash-light economy by 2023 through digitalization of financial services.
Under this scheme, the BSP aims to strengthen customer preference for digital payments by converting 50 percent of the total volume of retail payments into digital form and allowing 70 percent of Filipino adults into the formal financial system through payment or transaction accounts by 2023.
The regulator is also actively promoting digital banking and has recently issued six digital bank licenses. This is expected to further accelerate the creation of electronic money accounts.
A digital bank is one that offers financial products and services that are processed end-to-end through a digital platform or electronic channels with no physical, branch, sub-branch or “branch-lite” units offering these services.
“We expect the digital banks to help fuel recovery and long-term growth for the Philippines, alongside conventional banks,” Diokno said. “The Philippines does not simply aim to recover from the crisis.”
“There is a whole-of-government effort toward a post-COVID Philippine economy that is better than ever,” he added. “This means an economy that is stronger, more technologically advanced, more inclusive, and sustainable.”
Earlier, the BSP chief also urged the country’s financial technology firms to take advantage of the rise in digital transactions and favorable regulatory policies amid the coronavirus pandemic to grow their industry and provide much needed services to Filipinos.
Diokno said the ongoing public health crisis has prompted a surge in electronic transactions both in terms of volume and value.
The BSP noted a significant spike in digital transactions amid the pandemic.
As of end-July 2021, InstaPay transaction volume and value rose by 64 percent and 103 percent relative to the same period in 2020. Meanwhile, PESONet transaction volume and value also grew by 190 percent and 50 percent as of end-July 2021.