Digitalization to help keep inflation in check

Benjamin Diokno. INQUIRER FILE PHOTO/JOAN BONDOC

Ease of doing business as well as flow of goods and services to consumers through digitalization would help ease price hikes, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said on Tuesday.

“Digitalization is one of the huge changes that will have an effect in lowering the inflation in the long run,” he said in a statement.

“Aside from monetary and fiscal policies, technological advancements can help keep prices low and stable over the long term. By making payments and transactions more convenient, digitalization reduces the costs of production and distribution for businesses,” the BSP chief said.

“At the same time, digitalization has made it easier than ever for consumers to gather information on products and services and make informed purchases. Altogether, these forces encourage competition among enterprises to capture or maintain market share, which in turn helps keep consumer prices low and stable,” he added.

Amid the COVID-19 pandemic, digital payments grew its share to total financial transactions in the country to 20.1 percent from 14 percent in 2019, prepandemic. Nearly 10 years ago in 2013, a mere 1 percent of payments were made through digital channels.

The BSP’s 2020-2023 digital payments transformation roadmap aims to digitalize half of retail transactions in the country next year. It also aims to “onboard” 70 percent of Filipinos into the formal financial system in 2023.

“I am very confident, because we are ramping up the use of digital payments, that by the end of my term, we will reach the 50-percent target,” Diokno said. His term will end in July 2023. INQ