THE CENTRAL BANK’S financial inclusion and digitalization goals are likely to be met within the term of Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno as more Filipinos shift to online transactions amid the coronavirus pandemic.
“Our goal is that at least 70% of Filipino adults should have a bank account by 2023. But with the pandemic, we’re optimistic that we can meet this goal as early as December 2022,” Mr. Diokno said in a speech at a virtual meeting of the Bank Marketing Association of the Philippines on Tuesday.
The country’s banked population of adults stood at 29% or five million Filipinos as of 2019, improving from the 23% seen in 2017, data from the BSP showed. This means 51.2 million of about 72 million adult Filipinos were still unbanked as of 2019.
Mr. Diokno said the national ID system will help boost financial inclusion as it will take the place of the minimum of two government IDs required by most financial institutions of people opening an account.
The government has started the process of registration for the national ID system, prioritizing the enlistment of heads of low-income households.
“The BSP will print the first nine million [IDs] this year and the rest up to 2022,” Mr. Diokno said.
A joint study by The Economist Intelligence Unit (EIU) and consumer credit reporting agency TransUnion said the country’s digital ID program would be beneficial for the digitalization of the financial system.
“[E]xecutives also agree to a greater extent than average that it is difficult to reconcile multiple versions of consumer identity without a national digital ID,” it said.
Apart from having more Filipinos having accounts in formal financial institutions, Mr. Diokno said their target to have the country transition into a cash-lite economy could also be fast-tracked.
“My personal goal is that half of financial transactions in the country should be digital by 2023, the end of my term. But with the enabling regulations and the pandemic, this goal may be achieved sooner, perhaps by the end of 2022,” he said.
E-payments comprised 10% of the total transaction volume as of 2018 from a mere 1% in 2013, based on a study by United Nations-based Better than Cash Alliance report, By value, online transactions made up 20% of the total from 8% in 2013.
More than a third (37%) of senior executives in consumer-facing firms in the Philippines said “super apps” will become the dominant portal for digital commerce, based on the study by EIU and TransUnion.
“Looking ahead, companies in the Philippines must understand the long-term trends and innovations affecting security, privacy and fraud in order to balance optimal customer experience with rigorous security and fraud prevention and be best positioned to succeed,” it said.
Mr. Diokno said the exponential growth in the use of electronic fund transfer schemes InstaPay and PESONet as well as the increase in the usage of QR codes for payments will support the BSP’s financial inclusion goals.
InstaPay allows retail fund transfers below P50,000 to be credited real-time.
Meanwhile, PESONet processes batch fund transfers which are credited at the end of a banking day. The PESONet Steering Committee is eyeing to allow two settlements per day, even on holidays and weekends, by the first or second quarter of 2021. — L.W.T. Noble