The Bangko Sentral ng Pilipinas aims for a cash-light and financially included economy by 2023 through its Digital Payments Transformation Roadmap, Governor Benjamin Diokno said Friday.
The bank developed a roadmap where it targeted 50 percent of total retail transactions volume going digital, while 70 percent of Filipino adults being financially included.
“Our target is that by 2023, at least 70 percent of Filipino adults should have an account. This is an ambitious target, but we are confident of hitting it,” the central bank governor said in a webinar organized by GCash.
“The remaining roadblocks are being addressed not only by BSP but also by financial inclusion advocates, be it in the government or the private sector,” he said.
In line with its goal for innovative and responsible use of data for consumer empowerment and benefit, Diokno believes that the roadmap can be achieved with the help of digital payment streams, digital finance infrastructure and data governance and standards.
He admitted that the country can achieve digital financial inclusion after seeing a significant rating increase in terms of e-money activities and account ownership from 2017 to 2019.
“The 2019 financial inclusion survey showed that even prior to the pandemic, account ownership and with it, the use of digital financial services has increased,” he said.
Account ownership rose 6 percentage points to 29 percent in 2019 from 23 percent in 2017, translating into an additional 5 million Filipinos being financially included. Among the poorest (Class E), there was almost a doubling of account ownership to 27 percent in 2019 from 14 percent in 2017.
The uptake of e-money account ownership grew from 1 percent in 2017 to 8 percent in 2019 while the use of payment accounts for payment transactions also doubled to 39 percent in 2019 from 18 percent in 2017.
In terms of the e-money, there was a 61.6 percent growth year-on-year in the number of active e-wallets as of the third quarter of 2020.
"Indeed, we saw a rapid shift by customers, businesses and the government to digital payments. Cash withdrawals and check transactions significantly fell while electronic funds and transfers went up based on comparative data from 76 days before and during the enhanced community quarantine period," Diokno said.
The central bank chief also recognized the significance of digital payments amid the COVID-19 pandemic.
“The pandemic has disrupted our economy and daily lives; however, it also opened a path of opportunities for broader inclusive development,” he said. “The BSP has made digitization and digital financial inclusion a major and urgent priority especially in light of the pandemic.”
The BSP acknowledged that there were still challenges that needed to be addressed to achieve a higher financial inclusion.
“The lack of enough money remains the topmost reason for not having an account, followed by a perceived lack of need for an account, and then a lack of documentary requirements. Those are the three challenges,” said Leah Irao, BSP deputy director for the Payment System Oversight Department.
“It is important for us to promote the relevance and value of transaction accounts. They are not just for deposits; you can use them to send and receive money. It is not only for those who have money. Even if you have a minimum balance, you need to have an account because you can use it for other payment services,” she said.
Also speaking before the webinar, Bataan 2nd District Rep. Jose Enrique Garcia III emphasized the need to accelerate the adoption of digital payments among government institutions, businesses and the public through House Bill 8992.
“The objective of House Bill 8992 is to facilitate transactions, arrangements, and exchange of goods and services by promoting the universal use of safe and efficient digital payments and financial transactions of the government and the general public,” said Garcia, who co-authored the bill.
The central bank urged Filipinos to adopt digital payments, seek partnerships with and support from agencies and advocate for digital and financial literacy to achieve the goal by 2023.
“The future is digital, and it is here. We need to make sure that our constituents are not left behind. Let us prepare them for the new economy and equip them with access to transformative digital financial services,” Diokno said. James Paul R. Gomez and Mary Beatrice L. Umlas