Philippines should boost its digital payments

THE country should concentrate on improving the digital payment platforms InstaPay and PESONet before establishing a central bank digital currency (CBDC), a government official said on Monday.

During a Senate budget hearing on Monday, Finance Secretary Benjamin Diokno, a former central bank governor, underscored that establishing a CBDC is not yet the right time.

“Iyon po ang resulta ng study na hindi pa (The study results show that not) at this time. It will not be worthwhile,” Diokno said.

The Bangko Sentral ng Pilipinas (BSP) examined the usage of digital currencies in April for 24/7 large-scale transactions.

“Kung aabot tayo sa punto ng CBDC, hindi na tayo mag-i-imprenta ng pera, ‘yun ho ang ibig sabihin ‘nun (That means we will no longer print banknotes if we move to a CBDC), so that’s still on the background. Meron po tayong tinatawag na (We have digital payment systems called) PESONet and InstaPay, we will perfect that first,” Diokno said.

He also noted that the country now has six digital banks to cater to Filipinos.

These digital banks include UNObank Inc., UnionDigital Bank Inc., Tonik Digital Bank Inc., the Overseas Filipino Bank Inc., Maya Bank Inc. and GoTyme Bank Corp.

The Finance secretary added that several digital currencies, without the support of central banks, had crashed given the volatility and speculative nature.

PESONet, an electronic fund transfer (EFT) payment system introduced in 2017, allowed the government, businesses and individuals to transfer money, and conduct recurring payments in financial institutions supervised by the BSP within the same banking day.

InstaPay, another EFT payment system introduced by the BSP in April 2018, also enables people to transmit money across banks in real time.

“It’s working very well, so ngayon hindi ninyo na kailangan mag-issue ng tseke, ‘di ba (you do not need to issue checks), and then you can transact business without going to the bank,” said Diokno.

“You can pay your bills, transfer payments, et cetera,” he added.