The pandemic had a significant economic impact across the world and in the Philippines as well. Businesses have suffered significantly as a result, affecting millions of Filipinos. Due to the extreme loss of jobs and money, the majority of Filipinos required financial assistance to manage the impact of COVID-19.
The country’s financial ecosystem is expected to improve as a growing number of Filipinos transition to digital and cashless transactions. This will be more relevant and beneficial for those living in rural areas. In the Philippines, many rural banks continue time-consuming manual processes and requiring customers to have to commute long distances to undertake face to face financial transactions. For banking to thrive in remote rural areas, advanced digital and communications technologies should be utilised.
Against this backdrop, the state-owned Development Bank of the Philippines is set to provide a payment firm that it is in collaboration with end-to-end digital payment solutions. These will be deployed with its partners in the public sector such as national government agencies, local government units (LGUs), water districts, electric cooperatives, as well agricultural and industrial enterprises, including small and medium-scale businesses.
With the platform and dedicated solution, these institutions and enterprises will be able to accept any credit, debit, prepaid card, or e-wallet for both online and offline transactions. With this initiative, more Filipinos across the country will be able to settle their dues and taxes at their local government units (LGUs) and businesses in a safer and more convenient manner.
Rural or countryside areas always have a significant impact on a country’s overall economic development. The majority of people do not possess bank accounts in the same area. By using mobile wallets people from those areas can conveniently create bank accounts without physically going to a bank branch. Mobile wallets also present transparency in business transactions in rural areas. The increasing number of mobile and internet users in rural areas will pave the way for the use of better digital payment solution over time.
In terms of the banking environment, cashless payments can assist supervisors, central banks, and commercial banks in growing faster. Electronic payments provide for greater oversight and monitoring, as well as the ability to inform central bank monetary and economic policy.
Payment systems will evolve as digital lifestyles increase and more people around the world become linked. Consumers, businesses, and governments all stand to gain, and the expansion of e-commerce necessitates a reliable electronic payment infrastructure.
The Philippines’ Bangko Sentral ng Pilipinas’ (BSP) recently launched its Digital Payments Transformation Roadmap 2020-2023. This roadmap charts the BSP’s current initiatives and strategy in advancing an efficient, inclusive, safe, and secure digital payments ecosystem. The end goal includes increasing the number of Filipinos with access to financial services.
According to an article from OpenGov Asia, BSP explained that the government’s strategy to increase internet access across the country is concurrent and crucial to the BSP’s efforts to expand financial inclusion. The country’s central bank also provided detail on how they are running financial and digital literacy programmes with local communities such as fishermen and state institutions including the Civil Service and Philippine National Police (PNP).
The BSP expects a further surge in the use of digital platforms for payments and in the number of Filipino adults with financial accounts over the near term and confirmed that the BSP is on track with its financial inclusion and digitalisation goals.
They also recognise the importance of the country’s National ID System (PhilSys), in which mass registration is ongoing. This will help facilitate the Philippines’ digitalisation and financial inclusion goals. The PhilSys will squarely address the problem of lack of formal IDs among the marginalised, which is a major barrier for them to open a bank or financial accounts, the BSP added
Nonetheless, policymakers and corporate leaders should not underestimate the hurdles after thousands of years of fiat currency. The solution should be a comprehensive one that includes the appropriate infrastructure, legal frameworks, technology, and a willingness to cooperate and collaborate. The task is difficult, but the reward is faster growth and an economy enabled for the future.
