Bangko Sentral ng Pilipinas (Central Bank of the Philippines). REUTERS/Romeo Ranoco/File Photo
The Bangko Sentral ng Pilipinas (BSP) wants cooperatives engaged in the business of e-money issuance and payment system operations to follow “more stringent requirements” set by regulators, believing that these entities can help expand access to digital payments in the country.
The BSP is gathering feedback from stakeholders on a draft joint circular with the Cooperative Development Authority (CDA) that would guide cooperatives that are registered as e-money issuers and operators of payment system (OPS).
The central bank will collect the comments until Nov. 15. The planned regulations would also cover cooperatives applying for license to become an e-money issuer or an OPS.
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The proposed guidelines were a product of a 2023 agreement between the BSP and the CDA, which agreed to collaborate on the oversight and supervision of cooperatives that offer e-money issuance and operate platforms that enable payments and fund transfers, including those that deploy ATMs.
If the proposal is approved, failure to maintain compliance would result in the revocation of a cooperative’s OPS and e-money issuer license.
“It (draft circular) sets the guidelines and the minimum regulatory requirements for covered cooperatives to harmonize existing laws on payments with applicable law on cooperatives,” the document read.
”It likewise delineates the respective authorities of BSP and CDA… and establishes formal lines of communication to facilitate cooperative oversight on covered cooperatives,” it added.
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Data from the CDA showed there were 5,793 cooperatives that offer financial services in the country as of 2022, maintaining their substantial presence in municipalities across the archipelago. Despite the pandemic’s onslaught during that year, the CDA said cooperatives had served over 9.7 million members with financial offerings valued at P406.75 billion.
For the BSP, the wide reach of cooperatives can be leveraged to promote financial inclusion in the country and expand access to digital payments services.
The draft circular said the deal between the BSP and CDA would “result to (sic) greater transparency and accountability” of covered cooperatives and prevent “regulatory arbitrage“.