MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is urging banks and financial institutions to support the establishment of an electronic retail payments system to generate savings and at the same time expand the reach of financial services to more Filipinos.
BSP Governor Amando Tetangco Jr. said studies have shown shifting from paper based to electronic-based payment system could generate an annual savings up to one percent of gross domestic product (GDP).
Tetangco urged members of Bancnet and Megalink to participate in the creation of a National Retail Payment System (NRPS) while the integration of the two of the country’s largest automated teller machine (ATM) consortia is on going.
“These are significant milestones indeed but the story is not complete. Our eyes are now set on creating a NRPS and Bancnet should be part of this grand journey,” he said.
Tetangco said the NRPS envisions Filipinos to have easy access to financial services and have accounts to make payments, and receive or transfer funds to other accounts anytime, anywhere, at a reasonable price from any digital device.
He said an efficient retail payments system contributes to the stability and efficiency of the financial system and the economy as a whole.
He cited the country diagnostics conducted by the Better Than Cash Alliance (BTCA) showing Filipinos make about 2.5 billion payment transactions per month worth $74 billion.
However, only one percent are transacted electronically, while 99 percent of the transactions are paid either in cash or checks.
“NRPS will allow us to start reversing this ratio. In other words, you have the option to have a bigger slice of this huge pie. Indeed, while implementing the NRPS is most challenging, it also represents vast opportunities from the business point of view,” Tetangco said.
Furthermore, he said the digitization of payments could promote greater financial inclusion.
The National Baseline Survey in Financial Inclusion showed only four out of 10 Filipino adults currently have savings, of whom only 32.7 percent put their money in banks.