The issuance of the implementing rules and regulations (IRR) on broadening the provision of internet service through satellite services is seen by the Bangko Sentral ng Pilipinas (BSP) as further promoting financial inclusion and digital finance in the country. The IRR, issued in September by the Department of Information and Communications Technology (DICT) under Department Circular No. 002, Series of 2021, aims to promote the development of an inclusive and vibrant satellite industry by liberalising access to satellite systems.
Increased access to satellite services is expected to hasten the rollout of internet connectivity for the country’s unserved, underserved, geographically isolated, and disadvantaged areas. With the issuance of the IRR, banks, fintech companies, and other financial sector entities will be guided even further in their exploration of ways to use satellite technology for their operations, particularly in expanding presence in underserved communities.
With enhanced countryside connectivity, we see previously unserved and underserved areas being reached by digital financial services, especially those designed for the lower-income segments, like remittances, bills payments and the opening of transaction accounts.
– Governor, Bangko Sentral ng Pilipinas
As financial transactions and services shift to online platforms, internet connectivity is recognised as a critical enabler of financial and economic inclusion. Banks and other financial service providers (FSPs) will be able to better serve rural areas with more access points, such as automated teller machines and cash agent services that rely on internet connectivity, as internet service is expanded.
Meanwhile, with the introduction of the Philippine Identification System and its electronic know-your-customer service, increased internet access will enable more unbanked rural clients and low-income communities to use digital financial services and benefit from digital innovations.
Republic Act 11055, or the Philippine Identification System Act, was signed into law by the Philippines President in August 2018. Its purpose is to create a single national ID for all Filipinos and resident aliens. The national ID must be a valid proof of identity that can be used to simplify public and private transactions, school enrolment, and bank account opening.
It will also increase efficiency, particularly when dealing with government services, as people will only need to present one ID during transactions. “These developments will contribute towards the BSP’s financial inclusion targets, namely that first, 70% of the adult population should own a transaction account, and second, that half of all retail payments should be in digital form by 2023,” the BSP Governor said.
Ultimately, The BSP encourages financial service providers to seek opportunities for innovation and market expansion from this policy reform to accelerate financial inclusion in the country.
In addition, the World Bank’s Board of Executive Directors has approved a US$400 million loan to support reforms that will assist the Philippine government in accomplishing a resilient financial sector and ensuring a more inclusive recovery from the COVID-19 pandemic.
First Financial Sector Reform Development Policy in the Philippines, the financing loan is the first of two programmes that support three reform areas: strengthening financial sector stability, integrity, and resilience; expanding financial inclusion for individuals and businesses; and promoting disaster risk finance, which protects national budgets and businesses, as well as families’ lives and livelihoods, from the effects of disasters.
OpenGov Asia reported that the Department of Information and Communications Technology (DICT) will move forward with Phase 1 of the National Broadband Programme (NBP), which will boost the development of supplemental infrastructure or a “resiliency route”. According to the DICT secretary, the establishment of a resiliency route serves as insurance or a safety net against any unforeseen problems or events that could reason a delay in the project’s completion.
The Philippine government established the National Broadband Plan to accelerate the deployment of fibre optic cables and wireless technologies throughout the country, particularly in remote areas, and to improve overall internet speed and affordability (NBP).
