The Bangko Sentral ng Pilipinas (BSP) is optimistic that it will be able to find a cost-sharing system for the planned exclusion of transaction fees for money transfers less than P500 to further spur the use of digital payments in the country.
In a statement Thursday, BSP also said it would continue to work with banks on measures to lower or waive transaction fees for small e-payments to make financial digitalization more inclusive.
BSP Governor Felipe Medalla said earlier that one way to make digitalization more inclusive is to make small transactions free of charge so that low-income households could be encouraged to use digital payments.
He said if the value of the transaction is small and the charge is P15, for example, that fee is quite large relative to the transaction.
Reducing the cost of e-payments is in line with the BSP’s Digital Payments Transformation Roadmap 2020-2023, which aims to convert half of retail payments volume into digital form and to onboard 70 percent of Filipino adults onto the formal financial system within this year.
On Tuesday, BSP senior assistant governor Iluminada Sicat said in a forum that BSP was currently in talks with the 44-member strong Bankers Association of the Philippines for the possible removal of transaction fees for money transfers less than P500.
As of Feb. 1, 2023, there is no uniform amount of bank transfer fees via InstaPay. For instance, Asia United Bank charges P8; Bank of Commerce, P15 to P25; Bank of the Philippine Islands, P25; BDO Unibank Inc., P25; China Banking Corp., P10 to P25; East West Bank, P10; Land Bank of the Philippines, P25; Metrobank, P25; PayMaya Philippines, P15; Philippine Bank of Communications, P20; Philippine National Bank, P20 to P150; Rizal Commercial Banking Corp., P8 to P25; Security Bank Corp., P20 to P25; Standard Chartered Bank, P25; Union Bank of the Philippines, P10 to P30.
Medalla expressed optimism that with the way that the BSP and stakeholders were able to work together in the past, both parties would also be able to work together to find a cost- sharing system that excludes small payments from fees.
“… Provided it’s below a certain number of transactions, let’s say, three, three per day. And there is a way of sharing costs. I promise you, the central bank, will be in a greater hurry to cut reserve requirements so you can afford to give those [concessions],” Medalla said.
Reserve requirements are the minimum reserves required for depository institutions. They are set by the central bank within limits specified by laws for depository institutions. A change in the minimum reserve ratio affects the amount of its deposit base a financial institution can lend out.
Medalla earlier said the BSP may cut the reserve requirement from the present 12 percent within the first semester this year especially if monetary authorities are not pressured to increase the policy rates.
Last March 24, 2020, the BSP cut the reserve requirement ratios of universal and commercial banks by 200 basis points to 12 percent in a bid to boost domestic liquidity amid the onslaught of coronavirus disease or COVID-19 that threatens economic growth.