BSP chief raises target for cashless transactions

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is confident of raising the share of cashless transactions in the country to 30 percent from the original target of 20 percent by next year.

 BSP Governor Benjamin Diokno said in a press conference the new target could easily be achieved with the onboarding of government transactions on the National Retail Payment System (NRPS) via the government electronic-payments facility (EGov Pay) and the launch of the national QR (quick response) code standard.

“The original goal is 20 percent by 2020, the new goal is 30 percent by 2020,” Diokno said.

Based on estimates, he said the share of cashless transactions to total transactions is now already 30 percent from the previous one percent based on the survey conducted by the Better Than Cash Alliance (BCTA).

The BSP launched the NRPS in December 2015, paving the way for the introduction of automated clearing houses including the PESONet (Philippine EFT System Operations Network) and InstaPay.

Diokno said the country’s broadband capacity is set to quadruple especially with the entry of a third player in the country’s telecommunication sector.

With the launch of the EGov Pay through the Link.Biz portal of the state-run Land bank of the Philippines, the BSP chief said the government is looking at a 100 percent compliance by all government agencies and local government units (LGUs) by 2023.

“We will have a third player. The broadband capacity would quadruple in a few months. So I am confident that by 2023, if we all work together, we will have a 100 percent coverage. That is a promise,” Diokno said.

The EGov Pay and the pilot of people-to-people payments using the QR Ph are only among the first set of initiatives that the BSP and the Philippine Payments Management Inc. (PPMI) are working on to support the roadmap of shifting from a cash-heavy to a cash-lite Philippine economy.

 “The QR is primarily intended to enable micro-merchants to accept electronic payments. We hope that through the help of our industry partners, we can achieve not only our goal of a cash-lite economy but also enable more Filipinos to reap the benefits of a growing economy,” Diokno said.

The BSP chief added the aim of the government is to be a cash-lite economy over the next few years.

“I think cashless society will be in a matter of 10 years and not within the next five years,” Diokno said.

Diokno also noted about 70 to 80 percent of all Filipinos are expected to receive their national IDs within the next two years under Republic Act 11055 or the Philippine Identification System Act.

Vicente de Villa, managing director of the BSP’s Financial Technology Sub-Sector (FTSS), said the EGov Pay facility is now fully launched to the public as a payment solution that enables a streamlined digitalization of government collections and disbursements.

Aside from the Bureau of Internal Revenue (BIR), de Villa said the facility would now cover payments for the services rendered by the Department of Trade and Industry (DTI) as well as the Philippine National Police (PNP).

Likewise, de Villa said city and local governments of Manila, Quezon City, General Santos, Valenzuela, San Pedro in Laguna and Baler are now onboarded in the EGov Pay facility.

The digitalization of government payments is aimed at curbing revenue leakages through efficient collection means, better audit trail, and enhanced transparency.

Likewise, the digital payment services would also help the government to promptly deliver social services through the quick and safe means of disbursement or paying out funds to concerned stakeholders.

On the other hand, Asia United Bank China Bank, Landbank, Yuchengco-led Rizal Commercial Banking Corp. (RCBC), PayMaya, and Aboitiz-owned Union Bank pilot tested the first payment using the QR Ph through InstaPay.