Finance Secretary Benjamin E. Diokno has showcased the progress of the Philippines’ digitalization initiatives and urged the global community to rapidly digitalize payments as a means to accelerate climate action in a 2023 United Nations Climate Change Conference (COP28) side event.
With the support of UN-based Better Than Cash Alliance, the “Responsible Digital Payments to Accelerate Climate Action” event served as a platform to launch a new global Call-to-Action urging governments, humanitarian actors, and international financial institutions to support emergency response and climate resilience through inclusive digital payments.
Located in the typhoon belt and the Pacific Ring of Fire, with about 60 percent of the population situated along coastlines, the Philippines constantly experiences unavoidable losses and damages amounting to around $10 billion over the past decade due to climate-related hazards.
Annual losses from typhoons have been estimated at 1.2 percent of the Philippines’ gross domestic product (GDP). About $3.2 billion per year will be lost due to future typhoons and earthquakes.
“These staggering numbers have prompted the government to explore and develop innovative solutions to secure a climate-resilient future for the Philippines,” Diokno said.
When he served as Bangko Sentral ng Pilipinas Governor, Diokno led the launch of the Digital Payments Transformation Roadmap, which identifies initiatives and strategies for creating an efficient, safe, and inclusive payments ecosystem in the Philippines.
The BSP targets to convert 50 percent of all retail payments into digital form by 2023.
According to the Finance Secretary, digitalizing the payments system can help unlock greater efficiency and more options for beneficiaries of social protection programs.
This is evidenced by the Philippines’ successful Pantawid Pamilyang Pilipino Program (4Ps) which brought rapid relief to affected sectors of the country through digital cash transfers.
Even development partners that utilized the 4Ps’ digital payment platform for emergency responses were able to experience a significant reduction in their administrative and transaction costs.
On top of this, the Department of Social Welfare and Development (DWSD) launched the Beneficiary FIRST (Fast, Innovative, and Responsive Service Transformation) Social Protection Project with the World Bank (WB) to achieve digital data governance and digital payments, including transactional accounts for 4Ps beneficiaries.
Meanwhile, the Department of Finance (DOF) formulated the Philippines Disaster Risk Financing and Insurance Strategy to provide a comprehensive framework for the implementation of financial protection solutions at the national, local, and individual levels.
“The Philippines recognizes that improving climate resilience and disaster response through digital payments requires digitalization of social safety nets. This includes improving financial services and infrastructures for digital payments, among others,” Diokno said.
He said the administration is committed to pushing for more digitalized transactions in all government agencies, especially frontline offices like local government units (LGUs) to provide seamless and accurate service to the Filipino people.
“Digitalization is key to expediting payments to disaster-affected or disaster-prone communities and ensuring that payments will reach individuals wherever they are,” Diokno said.
This move is in line with the President’s 8-Point Socioeconomic Agenda on enhancing the digital economy, and is laid out in the Philippine Development Plan (PDP) 2023-2028.
