BSP: Tech-based financial inclusion to boost GDP growth by 3%

By: - Reporter / @daxinq
/ 05:17 PM October 18, 2018

The local financial industry should use technology to bring the benefits of banking to more Filipinos and, in doing so, help the Philippine economy grow faster, a ranking Bangko Sentral ng Pilipinas (BSP) official said on Thursday.

Speaking during the launch of the Digital Transformation Accelerator Program of the central bank and the financial technology unit of telecommunications giant PLDT, BSP Deputy Governor Cyd Tuaño-Amador noted that an estimated 47 million adults are still unbanked or excluded from the formal financial system.


“The challenge of financial empowerment continues,” she said, explaining that the archipelagic nature of the Philippines’ territory, with more than 7,000 islands and a population of over 100 million people of varied cultural backgrounds also makes greater financial inclusion difficult.

Nonetheless, the BSP official said that regulators have been encouraging private sector players like banks and telecommunications firms to being banking closer to the people through the use of technology, especially the ubiquitous mobile phone.


Tuaño-Amador quoted studies conducted by the Asian Development Bank estimating that the use of digital technology to promote financial inclusion can raise economic output or GDP by 2-3 percent in the case of the Philippines, and up to 6 percent in other Southeast Asian economies.

“The impact of these technological applications can be significant,” she said. “These are definitely palpable gains in the financial inclusion agenda should they eventuate.”

“Leveraging on its high penetration rate, mobile phones are being used to carry e-money, conduct payment transactions, and tap loan, insurance, and investment products,” Tuaño-Amador said.

The BSP, she added, champions the cause of financial inclusion and the use of digital technology through the creation of an enabling environment and a vibrant digital financial ecosystem.

Toward this end, the BSP has issued policies such as the framework for the basic deposit account and risk-based know-your-customer rules, which allow Filipinos to easily open accounts, save money, and receive payments, and which provide them with an entry point to the digital finance ecosystem.

Other initiatives of the BSP include the modernization of the country’s payments streams through the National Retail Payments System.  The Philippines now has two multilateral automated clearing houses that enable clients to enjoy safe, affordable and user-friendly retail payments systems. These are PESONet, a batch electronic transfer credit that could be used to replace checks, and InstaPay, a real-time, low-value automated clearing houses that allows for 24/7 electronic fund transfers.

Other policy issuances that allow for the operation of cash agents and “branch lite” units—though pertaining to the expansion of the physical financial touchpoints—are also supportive of the digital financial ecosystem as they facilitate onboarding and makes use of technological innovations.


“The signing into law of the Philippine Identification System in August this year, which is a measure creating a biometric foundational national identification system, can accelerate financial inclusion by making identity authentication more efficient,” she said. /jpv


BSP allows banks to use ‘cloud’ computing technology

Read Next
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: BSP, Business, local news, Philippine news update, technology
For feedback, complaints, or inquiries, contact us.

© Copyright 1997-2020 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.