The Bangko Sentral ng Pilipinas (BSP) is asking banks to lower or completely eliminate fees for electronic fund transfers to help the government’s efforts to transform the Philippines into a cash-lite economy.
BSP Governor Felipe Medalla spoke at the Annual Reception for the Banking Community about making digitalization more inclusive. He suggested eliminating fees on small-value fund transfers to encourage more Filipinos to use digital payments.
Medalla pointed out that a ₱15 fee for a ₱200 transaction is quite large relative to the amount being sent. He suggested finding a cost-sharing system that excludes small payments from fees, provided it’s below a certain number of transactions per day.
The value of electronic fund transfers in January 2023 jumped by 36 percent to ₱955.9 billion, according to BSP data. The combined value of PESONet and InstaPay transactions in 2022 also rose by 36 percent to ₱9.94 trillion. However, Medalla said the BSP needs to make digitalization more inclusive. By eliminating or reducing fees on small transactions, the poor can also benefit from digital payments.
Medalla suggested further cutting the reserve requirement ratio (RRR) to enable banks to make these concessions. During the height of the pandemic, the regulator reduced the RRR of big banks to 12 percent. The BSP aims to reduce the country’s RRR, the highest in the region, to single digits by 2023.
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BSP is committed to championing financial inclusion in digitalization to build a technologically advanced, environmentally friendly, responsible, and financially inclusive economy.