BSP supports fintechs, tracks crowdfunding

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is supporting financial technology companies or fintechs as it closely monitors industry developments on crowdfunding and peer-to-peer lending.

BSP Governor Nestor Espenilla Jr., in a round table discussion with industry leaders led by PLDT Inc. chairman Manuel V. Pangilinan organized by FINTQ, said the regulator is constantly surveying fintech activities of emerging market players.

Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people conducted often through dedicated web platforms.

“While crowdfunding clearly has a potential to expand financial access for new businesses and MSMEs, there’s also heightened risk of investor and consumer abuse,” he said.

Espenilla said the BSP has shared its research about the online fund raising activity with other members of the inter-agency Financial Sector Forum (FSF) including the Securities and Exchange Commission (SEC), the Insurance Commission and the Philippine Deposit Insurance Corp.

“Since the crowdfunding industry is still nascent in the Philippines, it may be not yet the time to issue regulations,” he added.

The BSP chief pointed out authorities would continue to monitor the crowdfunding industry and take regulatory action when the time comes.

The SEC has started drafting rules for crowdfunding in a bid to regulate the digital platform and deter scam operators from taking advantage of the new fund-raising venue.

Earlier, Espenilla said the regulator should remain vigilant as fintechs usher in cyber-security concerns while providing interconnectivity, convenience and efficiency in the delivery of financial products and services.

As part of the regulatory framework promoting fintechs, he said the BSP continues to undertake market surveillance, pilot testing activities, collaborate with stakeholders, and pursue the National Retail Payment System.