Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Tuesday he expects the wider adoption of digital payments to have a positive impact on inflationary trends in the coming months.
“Digitalization is one of the huge changes that will have an effect in lowering the inflation in the long run,” Diokno said during the gathering of journalists and opinion-makers of the Tuesday Club.
He said aside from monetary and fiscal policies, technological advancements could help keep prices low and stable over the long-term.
“By making payments and transactions more convenient, digitalization reduces the costs of production and distribution for businesses,” he said.
He said digitalization made it easier for consumers to gather information on products and services and make informed purchases.
These forces encourage competition among enterprises to capture or maintain market share, which in turn helps keep consumer prices low and stable, he said.
Under the Digital Payments Transformation Roadmap 2020-2023, the BSP pursues the twin goals of converting at least 50 percent of all retail transactions into digital and onboarding at least 70 percent of the population to the formal financial system by 2023.
The share of digital payments to total financial transactions reached 20.1 percent in 2020, up from 14 percent in 2019 and 1 percent in 2013.
“I am very confident, because we are ramping up the use of digital payments, that by the end of my term, we will reach the 50-percent target,” Diokno said.
Diokno said inflation would remain manageable in 2022 and 2023 unless world crude prices continued to increase in the coming months.
He projected inflation to average 3.4 percent in 2022 and 3.2 percent in 2023, both within the target range of 2 percent to 4 percent.