By Melissa Luz T. Lopez, Senior Reporter
SHIFTING government fund releases to digital channels will give a substantial boost to electronic payments, the central bank chief said, but flagged that connectivity issues remain a barrier to adoption.
Industry officials said they are on track to raising e-payments to 20% of total transactions by 2020 as they expect exponential growth in using e-payment platforms.
“One of the approaches that we are working on is to push for the government to transition from its current form of collections and disbursements to digital form,” said Raymond O. Estioko, head of the Bangko Sentral ng Pilipinas (BSP) Payments System Oversight Department.
“Discussions are going on with several government agencies. We believe that we will be able to convince the government to go digital because it is more convenient, more efficient for them.”
BSP Governor Nestor A. Espenilla, Jr. added that the biggest barrier to shifting state disbursements — such as benefit payments, cash transfers, and tax collections — is technology. However, he said state-run lenders are already scaling up to offer these platforms.
“The current arrangement is they have government banks. The government banks are already gearing up to be able to participate, so it is just a question of months before they are ready,” Mr. Espenilla told reporters during a media forum yesterday.
“That is why I am quite confident that 20% (by 2020) is very doable.”
The central bank targets to shift cash-heavy transactions to digital avenues via the NRPS, which they expect to help broaden access to financial services and spur increased economic activity. The BSP targets to lift the share of digital payments from a measly 1% recorded in 2013.
So far, industry players have rolled out the Philippine Electronic Fund Transfer System and Operations Network (PESONet) to process high-value interbank payments as well as the InstaPay platform for real-time transfers worth below P50,000.
Justo A. Ortiz, chairman of the Philippine Payments Management, Inc. (PPMI), said the 20% target can be achieved but would require “mass adoption” among the public, which in turn will push faster peer-to-peer, retail and even government payments.
BSP Deputy Governor Chuchi G. Fonacier also said that they expect the signing into law of the Philippine ID System Act is expected to broaden financial inclusion, as it would simplify the client verification process needed to open bank accounts.
Of the 74 PPMI member institutions, 58 banks and financial firms are currently offering the PESONet service while 48 are aboard the InstaPay as of July 31, according to industry data.