MANILA, Philippines—A fifth of all financial transactions made in the Philippines in 2020 were through digital channels, due to a large degree to small retail payments made necessary by safety protocols imposed for the COVID-19 pandemic, according to the central bank.
At an online briefing, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the latest report of the regulator confirmed that it achieved its target of reaching 20 percent digital in total transaction volume by 2020.
The report said 20.1 percent of monthly payment volume was done digitally by the end of 2020 — an improvement over the level for the first semester of the year of 17 percent.
The value of digital payments also grew from 25 percent to 26.8 percent during the same period.
“While the COVID-19 pandemic may have disrupted our way of life, it also created exceptional opportunities to boost digital payments and financial inclusion in the country,” Diokno said.
He noted that the increased use of digital payment was largely driven by high-frequency, low value retail transactions such as person-to-merchant payments and person-to-person payments like electronic fund transfers.
The health protocols that entailed mobility restrictions in response to the COVID-19 pandemic have emerged to be a strong catalyst for the wider adoption of digital payments in the country.
More consumers have also become “digitally-engaged” and have adapted to the use of digital payments for their financial transactions as shown by the sustained rise in the volume and value of merchant payments and remittances, the central bank report noted.
Diokno noted that, even before the pandemic, the BSP was able to lay down the foundations of an interoperable national retail payment system and enabling regulatory frameworks that allowed payment service providers to innovate and offer responsive digital payment products and services.
By the end of 2020, digital merchant payments surged by 47.8 percent in volume or an increase by 250.2 million transactions from 2019.
Significant contributors to the overall rise in digital payments volume included remittances which grew by 18.1 percent, reflecting the wider usage of wallet-to-wallet electronic fund transfers, and government salaries and payroll which registered an increase of 21.1 percent. The rise in digital government payroll was due to the shift from cash to digital payments of salaries by government institutions.
“The BSP will continue to perform its catalytic role to further advance the country’s digital payments transformation to promote the economic empowerment of our fellow Filipinos and ensure that everyone reaps the benefits from having universal access to digital payment services, especially during these extraordinary times,” Diokno said.