ABS-CBN News
Posted at Dec 27 2021 01:25 PM
MANILA - The Bangko Sentral ng Pilipinas (BSP) urged foreign investors to bring advanced technology into the local financial ecosystem.
Doing so will give them access to the untapped potential in the space, BSP Governor Benjamin Diokno said in a statement.
“As we build our digital finance ecosystem, we encourage foreign investors who may bring advanced technologies and technical expertise to take advantage of untapped potential in the financial services space and be our partners in achieving our economic growth and financial inclusion objectives,” Diokno said during the Philippine Economic Briefing for Foreign Chambers of Commerce jointly organized by BSP and the Department of Finance.
According to the BSP's 2019 Financial Inclusion Survey, 71 percent or 51.2 million Filipino adults had no bank accounts while 30.8 percent of cities and municipalities had no banking offices as of the third quarter of 2020.
The pandemic, however, accelerated digital adoption and banking inclusion.
By investing in financial technology, service providers and investors may tap into a wide client base, diversify revenue sources, and secure new growth opportunities in the country "thereby improving efficiency in banking operations," Diokno said.
Knowledge transfer and innovation will also boost the competItiveness of local banks, he said.
New technology can help banks expand access to new markets through partnerships and tie-ups, and enable consumers to gain from increased access, lower costs, better products and improved experience, he said.
The central bank is also advocating for digitalization under its 2023 Digitalization Roadmap in anticipation of a future-ready financial landscape.
Under the roadmap, the BSP aims to digitize 50 percent of payments and encourage 70 percent of the population to open bank accounts by 2023.
Economic managers have said digital reforms such as the national ID could accelerate financial inclusion in the country.
Based on the latest BSP report in October, at least 1 in 5 payments are now digital.
Bangko Sentral backs digitalization of microfinancing firms
The Bangko Sentral ng Pilipinas said Friday it was committed to helping microfinance institutions (MFIs) digitalize in order to expand services in the countryside
Microfinancing plays a huge role in financial inclusion especially in remote areas being the "last-mile" financial institutions, the BSP said in a statement.
This type of financial institution helps reduce the dependence on informal lending.
“We continue to engage the donor and development communities to encourage the provision of technical and financial assistance for the digitalization initiatives of MFIs,” BSP Governor Benjamin Diokno said in a forum with a network of microfinance firms.
“We are thus working to further ensure MFIs are equally placed alongside big industry players and well-positioned to advance financial inclusion beyond the pandemic,” he said.
As of the first quarter of 2021, there were about 149 microfinance banks catering to 2.05 million borrowers, the central bank said.
Diokno urged MFIs to participate in the central bank's digital transformation roadmap.
The goal is to convert 50 percent of payments to digital and encourage 70 percent of the population to open bank accounts by 2023.
Part of the roadmap is the rollout of the Philippine National ID (PhilSys) which will ease bank account openings through online and real-time Know-Your-Customer (KYC) activities and reduced costs, the BSP said.
Microfinancing firms can also tap digital banks as partners, the central bank said.
So far, the BSP has granted 6 digital bank licenses to operate in the country.
This new banking framework has no physical branches and is designed to make opening bank accounts more accessible especially for the unbanked.
Gokongwei's GoTyme, Union Bank's UnoBank, PayMaya's Maya Bank, Land Bank's OF Bank, as well as Tonik Bank and UnoBank backed by foreign investors have secured digital banking licenses from the BSP.