MANILA, Philippines—The country saw a surge in the use of electronic payment systems at the height of the COVID-19 pandemic in 2020 which went with a decline in the use of cash for transactions, according to the head of the central bank.
Every current indication points to an increase in the use of digital methods, such as quick reaction or QR codes, to transfer money between people and merchants as the economy is seen to progressively reopen in 2021.
“The BSP expects the transition to gather pace amid the rise in electronic payments during the COVID-19 pandemic,” said Bangko Sentral ng Pilipinas Governor Benjamin Diokno at an online press briefing on Thursday (Feb. 4).
“In view of this, the BSP will continue to engage the public to ensure that Filipinos will adjust well to this transformation,” he said.
The BSP chief described the current landscape as undergoing a phased digital transformation where the economy will transition from a cash-heavy to a cash-light environment by 2025, and eventually, to a coin-less and cashless society.
Diokno pointed to person-to-person use of the QR Ph digital payment scheme which grew by at least 5,678 percent in terms of transactions in December 2020 just a year after its launch.
The corresponding value of these transactions jumped by 15,687 percent during this period.
Quarterly data also showed that there was a 286 percent rise in volume and 301 percent increase in value in the second quarter of 2020, and there was another surge of 189 percent in volume and 537 percent in value in the last quarter of 2020.
“This trend signifies consumers’ growing confidence in using QR Ph [for person-to-person payments],” he said.
As physical distancing and quarantine protocols drove the use of digital payments, transactions made through the PESONet and InstaPay electronic settlement systems also posted record highs last year.
In 2020, the volume of PESONet transfers surged to 15.3 million transactions, up by 376 percent year-on-year. The value of PESONet transactions rose by 188 percent to reach P951.6 billion.
During the same period, payments made through InstaPay reached 86.7 million transactions, up by 459 percent. These transactions were valued at P463.4 billion, which represented a 340 percent increase.
As this happened, Diokno noted that coin demand in 2020 fell by 57 percent in volume and 60 percent in value compared to 2019.
“While softer economic activity may have partly led to the drop, broadening access to safe and convenient e-payment options may have also contributed to the decline in coin demand,” he said.
He added that the central bank and the industry, led by the Philippine Payments Management Inc., are continuously collaborating to develop more avenues for safe and efficient digital payments.