As the digital space expands in the financial sector and gets embraced by more and more people, a cash-lite economy is a great possibility. Among those envisioning a cash-lite Philippines in the near future is the country’s central banker Benjamin E. Diokno.
“As Governor of the BSP (Bangko Sentral ng Pilipinas), one of my personal goals is to have not less than 50% of transactions, by volume and value, to be done digitally by 2023. With the pandemic, I am optimistic that this goal will be met even sooner,” Mr. Diokno said in a speech back in 2020. “Of course, this is consistent with my other vision of shifting from a cash-heavy to a cash-lite economy.”
BSP had already been pushing for digital transformation in the country’s financial services even before the pandemic. “We believe that the promotion of financial technology and digitalization will lead us toward achieving financial inclusion,” Mr. Diokno said.
In October 2020, the central bank presented the Digital Payments Transformation Roadmap 2020-2023 (DPTR), which the BSP Governor has referred to as “our blueprint for transforming the Philippines into a cash-lite society” in his speech during an HSBC virtual forum.
One of the strategic outcomes of the roadmap is a strengthened consumer preference for digital payments by converting 50% of the total volume of retail payments into digital, and for 70% of Filipino adults to be financially included. Another outcome is to make more innovative and responsive digital financial services available.
“Our thrust to promote digitalization of payments is also strategically geared towards furthering financial inclusion as we view the two to be mutually reinforcing: they go hand in hand, with each one enabling the other,” Mr. Diokno stressed further in the central bank’s DPTR press release.
The roadmap stated the strategic initiatives and priority actions mostly for 2020-2021.
One of the progress in these initiatives is the launch of the QR Ph person-to-merchant (P2M) payment facility in October.
“With today’s event, we are well on our way to becoming a cash-lite society. This milestone is testament to our commitment to overcome the challenges of broadening digital transformation in the country in our pursuit of the delivery of universal access to safe, affordable, and convenient digital payment services for all Filipinos,” the BSP Governor said during the launch.
In terms of the progress in digital payments adoption, according to BSP’s 2021 edition report on the country’s digital payments status, the volume of monthly digital payments reached 20.1% in 2020, thereby meeting its goal of “20% in 2020.”
Meanwhile, as of the first quarter of 2021, the proportion of banked Filipino adults reached 53%, Mr. Diokno shared in the said HSBC forum. This included basic deposit and e-money accounts.
“We are optimistic that digital payments adoption will sustain the upward momentum during the post-pandemic years and would allow us to achieve the 50% target by 2023,” Mr. Diokno said in the aforesaid central bank report. “The BSP has laid out regulatory reforms that served as strong foundations and is well-positioned to take advantage of fintechs in boosting the adoption of digital payments toward a cash-lite economy.” — Chelsey Keith P. Ignacio