EXPANDED ACCESS to internet service through satellite technology will help bring financial services to underserved areas, the central bank said.
“With enhanced countryside connectivity, we see previously unserved and underserved areas being reached by digital financial services, especially those designed for the lower income segments, like remittances, bills payments and the opening of transaction accounts,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said in a statement on Thursday.
The Department of Information and Communications Technology (DICT) last month released the implementing rules and regulations (IRR) of a new law that aims to promote the development of satellite industry in the country by liberalizing access to these systems.
Executive Order (EO) 127 gave telco players and other businesses wider access to all satellite systems.
The EO was backed by the recommendation of the Financial Inclusion Steering Committee, which is headed by the BSP, the National Economic and Development Authority (NEDA), the National Telecommunications Commission, and the government’s task force for pandemic response.
In the IRR, the DICT said inclusive access to satellite services is in line with the digital connectivity goals of the country under the Philippine Development Plan 2017 to 2022.
The BSP hopes this reform will encourage financial service providers expand their reach, which will improve financial inclusion.
The central bank said expanded internet connectivity will benefit financial service providers and allow them to give rural areas more access points, including automated teller machines and cash agent services.
It is also expected to help the central bank reach its target to have 50% of all payments done online and to bring 70% of Filipino adults into the financial system by 2023, Angelito M. Villanueva, chairman of Fintech Alliance.ph said.
“This reform is a big leap forward to help us realize the digital Philippines. With such facility, the reform seeks to enhance internet connectivity in rural areas which will then allow the opening of more digital access points and other fintech services,” Mr. Villanueva said in a Viber message.
Data from the BSP showed only 29% of adult Filipinos had formal financial accounts in 2019.
Meanwhile, 20.1% of the volume of monthly retail payments were done online last year. Cashless payments made up 26.8% of all transactions in terms of value in 2020. — L.W.T. Noble