Bangko Sentral, DOLE push for digital wage payments

CEBU, Philippines — Despite the advent of ATMs (Automated Teller Machines), and digital finance solutions, 70 percent of salaries from the private sector in the Philippines are still paid in cash, based on the 2021 Financial Inclusion Survey of the Bangko Sentral Ng Pilipinas (BSP).

For this reason, the BSP and the Department of Labor and Employment (DOLE) are encouraging decision-makers in the labor and employer sectors to promote the use of safe and efficient digital wage payments.

Digitalizing wage payments is one of the most effective tools in driving financial inclusion. A study indicated that more than half of adults in developing countries opened their first bank accounts to receive digital wage payments.

During the recently concluded 2nd Financial Inclusion Forum for the Labor and Employers Sector, DOLE assistant secretary Amuerfina Reyes said promoting digital payments of salaries for employees could improve the country’s financial inclusion goals.

Besides, Reyes said allowing these employees to join the digital finance sphere provides them the opportunity to improve their financial literacy, and security, among others.

For employees, wage digitalization can unlock access to financial products and services – such as savings and insurance – which enhance resilience and financial health.

For employers, digital wage payments bring significant gains such as productivity improvement, accuracy, safety, access to finance and markets, and enterprise formalization.

Emphasizing that financial inclusion is a whole-of-nation undertaking, BSP Deputy Governor Bernadette Romulo-Puyat said that given the value of digital wage payments to both the labor and the business sectors, the promotion of the shift from cash to digital payments should be sustained.

“Let us continue working together to make the goal of a more financially inclusive and resilient Philippines a reality,” Puyat said.

Forum speakers from the financial service providers sector discussed products that promote the financial health and resilience of employees, such as microinsurance and Personal Equity and Retirement Accounts.

The forum also highlighted the measures and mechanisms in place that protect the consumers of financial products and services.

Forum participants shared valuable insights such as strengthening security and infrastructure to enable wider adoption of digital wage payments.

The BSP-DOLE forum supports the priority initiatives under the National Strategy for Financial Inclusion (NSFI) 2022-2028 to expand digital payment use cases in the country.