See also Central Bank in Davao City address
“This partnership is instrumental in crafting a comprehensive regulatory framework that takes into account the unique challenges and opportunities facing regulatory bodies,” emphasized BSP Governor Eli M. Remolona Jr. on October 23.
He further stressed that this closer collaboration would yield “regulations that are proportionate, relevant, and future-proof.”
Remolona also noted, “The approach will minimize regulatory arbitrage and amplify transparency and accountability within the cooperative sector.”
Following the recent signing of a memorandum of agreement (MOA), the two agencies have established an oversight arrangement for cooperatives involved in electronic money or e-money operations.
The MOA outlines the specifics of the collaboration between the BSP and CDA, including concurrent oversight and regulatory processes, as well as information exchange to facilitate their respective mandates.
The BSP anticipates that this agreement will foster a more robust inclusive digital payment ecosystem through improved oversight.
In essence, the MOA, inked on October 18, will provide clearer guidance on the oversight and supervision of cooperatives functioning as e-money issuers and operators of payment systems, including those deploying ATMs, as explained by the BSP.
The BSP is mandated by the National Payment Systems (NPS) Act to oversee NPS, which encompasses these cooperatives.
“The cooperative oversight initiative promotes coordination between the BSP and government agencies to eliminate gaps, inefficiencies, duplication, and regulatory inconsistencies,” the BSP highlighted.
Additionally, the central bank stated that integrating cooperatives into NPS will align with the government’s digital payments transformation program and the National Strategy for Financial Inclusion.
According to the most recent data, financial cooperatives are present in 212, covering approximately 13 percent of unbanked municipalities.
The Philippines is witnessing a surge in digital payment transactions.
As of the end of 2022, BSP statistics revealed that approximately 42.1 percent of payment transactions had shifted to e-payment methods, a significant increase from 30.3 percent in 2021.
Under the BSP’s Digital Payments Transformation Roadmap, the goal is to have 50 percent of payment transactions in digital format by the end of 2023.
The share of digital transactions in overall payments has been steadily increasing, with both InstaPay and PESONet. Additionally, more individuals are opting for QR Ph codes for payments, and all payment service providers still using non-QR PH codes are expected to transition to QR Ph this month.
The BSP’s success in migrating more transactions to digital formats is attributed to merchant payments, peer-to-peer (P2P) transfers, and business payments of salaries and wages to employees. These payment streams predominantly consist of high-frequency, low-value retail transactions.
The BSP’s 2022 Status of Digital Payments report demonstrated that merchant payments continued to lead in the adoption of digital payment methods, marking a 35.6 percent year-on-year increase. Electronic payments to merchants surged from 1.112 billion transactions in 2021 to 1.507 billion in 2022.
Meanwhile, P2P transfers saw an impressive 91.2 percent growth in 2022, with transaction numbers increasing from 156.7 million in 2021 to 299.7 million.