BSP moves closer to granting four new digital bank licenses
From AB Capital's The Opening Bell: Three Moves
Event
The BSP has begun evaluating applications and may finalize a shortlist of candidates for four new digital bank slots within 1Q26. Only applicants offering genuinely differentiated business models (i.e. beyond what the six incumbents provide) will advance. Minimum capitalization remains at P1.0bn, with strict prudential requirements.
View
We think the reopening of licensing will deepen competition for deposits and accelerate product innovation, though immediate balance sheet impact remains modest. Digital banks handled P119.5bn in deposits and served 20.4mn customers as of September 2025, which is meaningful, but still small relative to the P15tn banking system.
Catalyst
Key watchpoints include which applicants make the shortlist, whether any are foreign-backed, and what unique value propositions they introduce (e.g. micro-merchant credit, embedded finance, or SME cashflow lending). Funding strategies will matter: a 50-100bp uptick in deposit competition could compress NIMs for traditional banks by 3-5 bps in a downside case.
Action
In our view, additional digital banks are a long-term positive for inclusion and payments depth, reinforcing digital-payments momentum (InstaPay/PESONet volumes up 217% in 2025). Near-term pressure falls more on smaller banks with weaker CASA franchises, while large banks (BDO, BPI, MBT) retain funding resilience.
Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.
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