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Philippines: Shift to e-payments to boost GDP growth – BSP

MANILA, Philippines — The ongoing shift to a cash-light from a cash-heavy economy could accelerate the recovery of the country from a pandemic-induced recession, according to the Bangko Sentral ng Pilipinas (BSP).

In a virtual press briefing, BSP Governor Benjamin Diokno said an empirical study showed that moving to a cashless model would have an impact of more than three percentage points to the gross domestic product of emerging economies like the Philippines and one percentage point in more mature economies.

“There have been well-documented benefits in doing electronic payments,” he said.

Diokno said the establishment of the Payments and Currency Management Sector (PCMS) in the BSP, headed by newly appointed Deputy Governor Mamerto Tangonan, aims to ensure the safety, efficiency and reliability of the payments system in the country.

“PCMS is tasked to maintain the safety and integrity of the local currency and to ensure a well-functioning payments and cash ecosystem that supports sustained and inclusive economic growth,” Diokno said.

Under its three-year digital payments transformation roadmap, the BSP has committed to convert 50 percent of the total value and volume of retail payments into digital form and double the number of Filipino adults with bank accounts to 70 percent by 2023.

“A very important benefit of digital payments is financial inclusion for more people, including small business which are ushered to the formal financial system,” the BSP chief said.

Data from the Philippine Statistics Authority showed that 99.5 percent of businesses in the country are micro, small and medium enterprises (MSMEs).

“When this important segment goes digital and begins to reap the benefits of cost savings, transparency, and easier access to finance, they become more empowered and active contributors to broader economic growth,” Diokno said.

For his part, Tangonan said the BSP would prioritize the launch of new digital channels such as the inclusion of the person-to-merchant or P2M payments in the National QR (quick response) standard following the successful person-to-person payments.

Tangonan said the BSP would also introduce the one bills payment facility that would allow billers to collect from their customers even if their payment service providers are different from those of the customers.

Likewise, Tangonan said, the request to pay service would also be launched to provide a more flexible way for businesses and consumers to make payments.

Another initiative is the direct debit use which allows payers to send the payee an electronic authority or mandate to draw funds directly from the payers’ accounts on a regular basis.

There has been a surge in the volume and value of digital fund transfers via the PESONet and InstaPay last year due to the shift in consumer behavior amid the pandemic.

Tangonan is set to handle the currency and securities production sub-sector heady by BSP managing director Mary Anne Lim, the payments and currency development sub-sector headed by BSP Assistant Governor Edna Villa, and the payments and currency management operations sub-sector headed by managing director Elvira Lorico.

Source: https://www.philstar.com/business/2021/02/25/2080148/shift-e-payments-boost-gdp-growth-bsp