In a recent conference organised by the Bangko Sentral ng Pilipinas (BSP) Payments and Settlements, it was highlighted that there is a critical need to put appropriate and innovative systems in place to process financial transactions in the most efficient way possible, at the same time, ensuring the safety and integrity of these transactions.
According to the report released by BSP, subject matter experts conveyed how keeping abreast with developments in the financial system, establishing appropriate best practices and risk management measures, and fostering reliable market infrastructures are keys to providing a safer, more efficient, and inclusive Philippine payments and settlements system.
The conference, which was held at the BSP on 27 July 2018, discussed how BSP supports not only large-value and time-critical transactions, but also encourages financial transactions on the retail level as these promote cost benefits to businesses and consumers alike.
In his opening remarks, BSP Governor Nestor A. Espenilla Jr. said that an efficient retail payment system has the potential to transform the economy through the efficiency it brings to business transactions and the savings generated from a shift from paper-based to digital instruments.
He emphasised that it would benefit the consumers and businesses in terms of the affordability, convenience and speed of payment services. Retail payment, he added, is the most basic and most used financial service. This is financial inclusion.
The BSP has been pushing for payments to become more seamless between financial institutions within the Philippines, even as far as on a regional basis. It has been doing so through prudential regulations and guidelines as well as its own organisational transformation.
Several representatives from the financial industry attended the conference. Discussions during the event were centred on the current state of the retail payments industry, governance procedures under a newly-created department focused on payment systems within the BSP, and strengthening financial institutions against advanced forms of cyber threats.
A recent announcement released highlighted on the 2017 Financial Inclusion Survey (FIS) conducted by BSP, which is dedicated to collect financial inclusion data from the perspective of Filipino adults. A basic indicator of financial inclusion is ownership of an account that can be used to save money, receive salary, send or receive remittance, and pay bills. Several issues were raised concerning the financial inclusion of the Filipinos, which, according to the BSP, will be addressed by a National Retail Payment System.
Out of the 52.8 million adults who do not have an account, 60% cited not having enough money as the main reason. 21% reasoned lack of need while 18% was due to absence of documentary requirements. Other reasons mentioned are high cost (10%), lack of knowledge in account opening (9%), lack of work (8%), and lack of awareness (8%).