A BILL filed in the House of Representatives is seeking to attract financial technology (fintech) companies away from more crowded markets elsewhere in Asia.
House Ways and Means Committee Chairman Jose Ma. Clemente S. Salceda, representing Albay, said House Bill No. 7760, or the proposed Financial Technology Industry Development Act of 2020, will authorize the Bangko Sentral ng Pilipinas (BSP) to establish a Financial Technology Office (FTO) responsible for developing a Financial Technology Industry Roadmap, with the power to issue special investor resident visas for executives of foreign fintech firms.
The measure also allows the FTO to allow fintech firms to run pilot projects in small but deregulated markets, prior to broader launch.
“Make no mistake: We are in the game of (attracting) fintech investment. We have 74 million smartphone users who spend 10 hours a day on the internet. That is one of the biggest consumer markets for digital products in the world. For market-seeking firms, we are probably one of the most attractive,” Mr. Salceda said.
The bill defines fintech firms as those which use technology and innovation “to compete with or complement traditional financial methods in the delivery of financial services.” Some examples include virtual banks, online lending facilities, cryptocurrencies, and blockchain.
Mr. Salceda said foreign fintech companies are now looking for new host countries for their operations as “major centers of finance, such as Shanghai, are now saturated with other fintech companies.” He added that other financial centers, including Hong Kong, have imposed stringent laws on data management which hamper the sector.
On May 28, China passed a “wide-ranging” extradition law for Hong Kong which outlaws secession, “terrorism,” and other acts that endanger national security. It also allows Mainland security forces to freely operate in Hong kong. The new security law sparked protests over the alleged curtailment of basic freedoms. The law has also been widely opposed by the business sector because Beijing could interfere with data management.
HB 7760 authorizes the FTO, the BSP and the Department of Information and Communication Technology to hold an annual review of policy and infrastructure for data management to ensure that the government does “not excessively and unduly regulate data storage, transfer, and security among financial technology enterprises” and to ensure that the country’s data infrastructure meets the minimum standards required to develop a “sophisticated” financial technology sector.
“The bill is comprehensive enough to cover all the major concerns of the fintech sector. At the same time, there is enough regulatory leverage for the BSP,” Mr. Salceda said.
“Fintech is the future of money. I want the Philippines to be a leader in the area. If we are going to dream the future up, let’s dream big,” he added. — Kyle Aristophere T. Atienza