THE BANGKO SENTRAL ng Pilipinas (BSP) is drafting an industry report for digital banks that evaluates the six online lenders currently operating in the country, an official said.
BSP Deputy Governor Chuchi G. Fonacier told BusinessWorld last week that the report, once finished, will be submitted to the Monetary Board.
“We will present (the report) to the Monetary Board. We’ll give our perspectives on that as well. And from there, the Monetary Board can decide whether to lift the moratorium or (to extend the ban),” she said.
“For the meantime, there’s still a moratorium. But that moratorium may be lifted once the Monetary Board has seen that it’s time to take in more players. They’re just waiting for that industry report,” she added.
In 2021, the BSP imposed a three-year moratorium on the grant of digital banking licenses, capping the number of online lenders at six.
Ms. Fonacier said the BSP will release the industry report to the public once these six digital banks have been operating in the country for at least one year.
“At this time, we’ve already gathered the data and started to draft the report. But it would be unfair to the recently opened ones, or those who have started operations but they’re not actually yet a year in full operations. It would be premature to make a judgment,” she said.
She added that it may take three years for the BSP to monitor and assess the six digital banks.
The first bank to obtain a digital banking license was Overseas Filipino Bank, Inc. (OFBank), a subsidiary of state-owned Land Bank of the Philippines. OFBank launched in June 2020.
Four online lenders officially launched last year. This includes UNObank, Aboitiz-led Union Digital Bank, GOtyme of the Gokongwei Group and Singapore financial technology (fintech) firm Tyme, as well as Maya Bank of Voyager Innovations, Inc.
Meanwhile. Tonik Digital Bank, Inc. started operations in the Philippines in March 2021.
There are still a lot of players interested in applying for a digital banking license, Ms. Fonacier said.
“But the Monetary Board is not keen on granting more digital banking licenses right away because this is a new industry,” she said in mixed English and Filipino.
“It’s a new industry because it’s a distinct category of a bank. And with a lot of players, it may go out of hand if the BSP will allow more players right away. Slowly and steady,” she said.
Lenders with digital banking licenses are expected to help the BSP reach its goal of bringing 70% of Filipinos into the formal banking system and have 50% of transactions done online by the end of this year.
The share of digital payments in the country’s total retail transactions increased to 42.1% in 2022 from 30.3% in 2021. Meanwhile, the banked population was at about 56% of all Filipino adults in 2021, up from just 29% in 2019. — Keisha B. Ta-asan