THE demand for digital technology, including financial transactions, will increase as companies, schools, and government agencies implement work from home arrangements, virtual meetings and online transactions.
In a webinar sponsored by the Makati Business Club, Benjamin Diokno, Bangko Sentral ng Pilipinas Governor said the targets they previously set for digital transaction will be accelerated because of the COVDI-19 pandemic.
The BSP has previously said that they are targeting a “50 percent increase on the share of digital retail payment transactions and to have 70 percent of the adult population having and using transaction accounts” by the end of his term in 2023.
“But now with this pandemic the target will be accelerated,” Diokno said.
Diokno said digital technology will be critical in enabling simpler and more efficient transactions with government agencies.
“Business transactions such as online retail, online banking, online medical consultations, and digital payments, will increasingly become a necessity. All these need to be supported by a safe and reliable digital infrastructure system with robust and dependable cybersecurity protection,” Diokno said.
He stressed digital technology is also key to strengthening the government’s monitoring and evaluation systems for policy responses and actions.
“Human behavior is expected to change with social distancing as the new norm. People are expected to prefer using electronic payment and financial services to face-to-face and over-the-counter transactions,” Diokno said.
To expand the reach of digital transactions, Diokno sees the need to increase contactless payment facilities, such as PayMaya and Gcash. Their use can be expanded to include wet markets, retail stores, and public utility vehicles (jeep, taxis, tricycle, bus).
Diokno also sees the need to quicken the adoption of the National QR code standard (QR Ph) to enable interoperable payments for person-to-person (P2P) and person-to-merchant (P2M) transactions.
Diokno said that with the increased usage of non-bank channels to send/receive money, the BSP has been improving channels of remittances with the approval of new technologies in remittance transfers such as mobile phones, internet, cash cards.
“Admittedly, insufficient IT infrastructure leading to the slow internet connection, data privacy and cybersecurity risks, and lack of knowledge on new technologies may pose challenges in the implementation of financial digital services. Promoting financial literacy and ensuring good market conduct are likewise important to deepen the public’s trust in digital financial services,” Diokno said.
Earlier, Diokno highlighted milestones in its digital payment initiatives, which includes government e-payments under EGovPay, the use of QR Codes through QR Ph, the disbursement of Social Security System’s Small Business Wage Subsidy (SBWS) through PesoNet, and the conversion of 4Ps accounts into interoperable transaction accounts.
Entities participating in the EGovPay facility rose to 56 at end-March this year from only two when it was launched in November 2019. EGovPay allows individuals and businesses to pay taxes, permits, fees, and other obligations to the government electronically.
Participating government agencies include the Bureau of Internal Revenue, Department of Trade and Industry, Philippine National Police, Overseas Workers Welfare Administration and various local government units.
“By end-2020, 180 government entities are expected to be onboard the facility,” Diokno said.
This year, 21 BSP supervised financial institutions (BSFIs) are set to join the existing seven BSFIs that now offer QR Ph. The adoption of QR Ph will accelerate digital payments with the efficiency of scanning a standard QR code instead of encoding a payee’s account details.
While now only currently facilitating person-to-person payments, Diokno said QR Ph will further penetrate the market with the projected availability of the person-to-merchant QR Ph in the fourth quarter of 2020.
“This will enable merchants, including micro and small vendors, to accept e-payments by merely displaying a standard QR Code for their customers to scan,” Diokno said.
Meanwhile, majority of the Social Security System’s Small Business Wage Subsidy (SBWS) fund is disbursed through PESONet, an electronic fund transfer (EFT) service created under the National Retail Payment System initiated by the BSP.
The first tranche of SBWS covers 3.4 million eligible employees of small business affected by the enhanced community quarantine. It is expected that about 2.2 million beneficiaries with bank and e-money accounts will receive the SBWS through the PESONet.
As of 20 May 2020, nearly 2.0 million subsidy disbursements were released via PESONet.
In August 2020, Diokno said the conversion of nearly 3.9 million Pantawid Pamilyang Pilipino Program (4Ps) accounts into interoperable transaction accounts is scheduled to be implemented by Landbank of the Philippines. “This is a momentous development considering BSP’s target of 70 percent financial inclusion by 2023,” Diokno said.
Currently, deposits into the 4Ps accounts with the LandBank of the Philippines are limited to social aid from the Department of Social Welfare and Development.
The conversion will allow millions of 4Ps beneficiaries to receive funds from other sources including families, friends, local government units, and other benefactors through EFT services.
“These digital payment initiatives enhance coordinated government action and uplift the wellbeing of the Filipinos amid the challenges brought about by the COVID-19 pandemic. Moving forward, we shall continue to build pathways toward a cash-lite Philippine economy,” Diokno said.
