Latest news with #BangkoSentralngPilipinas
Coin Geek
a day ago
- Business
- Coin Geek
Philippines digital payments surpass 2024 targets, BSP says
Getting your Trinity Audio player ready... Digital payments have overtaken traditional cash-based transactions in the Philippines, with digital methods now accounting for 57.4% of total monthly retail payment volume and 59% of overall transaction value in 2024. This is according to the Philippine central bank, Bangko Sentral ng Pilipinas (BSP)'s 2024 report on the status of digital payments in the Philippines, which tracks the country's shift toward electronic finance. The latest data marks a 4.6% point increase from the previous year's 52.8%. The numbers exceed the national target of 52–54% set under the Philippine Development Plan 2023–2028. The central bank said this reflects a broad transformation in how Filipinos pay and manage money. 'These figures reflect the continued shift toward digital channels and the growing trust of Filipinos in using digital financial services,' Eli Remolona, Jr., BSP Governor, said. Source: BSP Merchant, P2P, and B2B transactions lead growth According to the report, the increase in digital payment adoption has been led by three key use cases: merchant payments, person-to-person (P2P) transfers, and business-to-business (B2B) supplier transactions. These accounted for 93.2% of the total volume, or 3.08 billion digital transactions in 2024. Merchant payments were the largest contributor, increasing 29.1% year-on-year to 2.2 billion digital transactions. These made up 66.4% of the total digital transaction volume. P2P transfers followed, totaling 680.5 million transactions or 20.6% of volume. This marked a 34.7% growth from the year before. The report said this growth was driven by broader access to transaction accounts and resulted in P2P transfers seeing one of the highest jumps among all digital payment types. B2B supplier payments increased from 160 million to 205 million digital transactions—an annual growth rate of 28.1%. 'This reflects the impact of the BSP's digitalization initiatives in the business sector,' the report stated. InstaPay and PESONet usage expands rapidly The use of fast payment channels like InstaPay and PESONet has grown considerably. 'InstaPay also saw significant growth, with a 67.8% rise in transaction volume and 46.3% in value from 2023 to 2024, highlighting its popularity for fast, low-value P2P transfers,' the BSP stated. Meanwhile, PESONet benefited from the expansion of its clearing cycles. 'The expansion of PESONet transactions, supported by the addition of a third daily settlement cycle in July 2024, has further boosted digital supplier payments,' the report noted. These developments reflect consumer demand and payment infrastructure upgrades enabling faster, more flexible financial flows. Government sector achieves nearly complete digitalization Among the three main payment originators—Government (G2X), Businesses (B2X), and Persons (P2X)—the government sector achieved the highest level of digitalization. According to the BSP, 97.2% of government payments were processed digitally in terms of volume and value. 'Government disbursements are highly digitalized at 97.2%,' the report stated. This figure confirms the public sector's continued leadership in adopting electronic payment mechanisms, especially for social transfers, wages, and supplier contracts. Personal transactions see substantial gains in digital use Personal payments (P2X) have made advances as well. The BSP found that 72.2% of P2X transactions were processed digitally by volume, while 80.4 % of their total value was digital, representing a 5.3% increase from 2023. The BSP also recorded a decline in non-digital personal payments, which may signal a permanent behavioral shift. 'A decrease in the volume of non-digital payments which could indicate a shifting preference to pay digitally,' the report stated. Of the 5.8 billion retail transactions recorded in 2024, 70.5% originated from P2X payments. This made personal payments the dominant force in the retail space, not only in frequency but also in financial impact. Source: BSP Business transactions lag in volume but improve in value While businesses still trail in digital volume, their contribution in terms of transaction value is rising. Just 19.8% of B2X transactions were digital by volume in 2024. However, they accounted for 38.6% of the total value, showing the growing impact of digital adoption in corporate finance. 'Business-to-business (B2B) payments accounted for 26.1%,' the BSP stated, referring to the share of business-to-business payments in the overall retail transaction mix. This indicates improved operational efficiency among firms using digital channels for supplier and vendor transactions. Retail payments landscape still dominated by P2B and B2B The BSP's diagnostic study of retail payments showed that person-to-business (P2B) and business-to-business (B2B) payments together accounted for 83.5% of all transactions. 'Person-to-business (P2B) payments made up 57.3%, reflecting increasing digital use for everyday expenses like merchant purchases, utilities, and loan repayments,' the BSP said. 'Notably, person-to-business (P2B) and business-to-business (B2B) payments together account for 83.5% of total retail payments, highlighting their strategic importance in driving payment system improvements,' the report added. BSP's vision: Digital by default, with consumer trust Remolona said the central bank's objective goes beyond improving statistics. 'This is more than just a continuation of past gains. It is a reaffirmation of our collective vision, of a future where every Juan and Maria, no matter where they are in the archipelago, can access and benefit from secure, reliable, and convenient financial services.' Remolona emphasized that innovation is a means to uplift people, especially the unbanked. 'We recognize that innovation is not an end in itself, but a powerful means to reach people, especially the unbanked and underserved, with tools that uplift lives.' Deputy Governor Mamerto Tangonan stressed the need for digital to become part of daily life. 'We aim to move beyond first-time adoption to sustained, habitual use, where a person chooses to transact digitally not just once or occasionally, but consistently across different payments needs and platforms,' he said. Tangonan added, 'Our deeper challenge [is] to ensure that digital payments are not just adopted but be integrated into the daily lives of every Filipino.' Remolona concluded, 'We envision a future where digital becomes the default, not only because it is mandated but because the end users see real value in its convenience, security and the feeling of empowerment.' Regulatory focus: Safety, interoperability, and inclusion The BSP underscored that trust and safety must accompany innovation. 'Safety in payments, whether digital, physical or cross-border, is non-negotiable,' the report stated. To this end, the BSP is building 'a regulatory environment that is vigilant, agile and informed. One that works alongside innovation, not to stifle, but to guide its responsible use.' The ultimate goal is 'a national retail payment system where one account is sufficient to meet all payment needs of a person in a secure and convenient manner.' Cross-border, CBDC, QR, and direct debit are among key projects Several initiatives launched or expanded in 2024 are aimed at accelerating progress. These include Project Nexus, which connects fast payment systems between the Philippines, India, Malaysia, Singapore, and Thailand. 'This project aims to enhance cross-border payments by connecting the domestic instant payment systems of participating countries,' the BSP explained. Project Agila, the BSP's wholesale central bank digital currency (CBDC) pilot, tested institutional payments even when the RTGS system was down. Results will inform the BSP's future CBDC roadmap. QR Ph was also enhanced. 'Users will now use InstaPay QR (with InstaPay logo) for P2P transfers, while the existing QR Ph code (red-blue-yellow logo) will continue for merchant payments,' the BSP stated. Upcoming policies to improve affordability and oversight The BSP is also advancing policy reforms. A draft circular proposes appointing designated managers for payment systems, while another mandates technical and governance requirements for clearing switch operators (CSOs). In response to high transaction fees, the BSP is crafting policies to make digital payments more affordable and accessible. 'High fees remain a barrier,' the BSP noted. Circular No. 1195 addresses electronic fund transfer complaints, while Circular No. 1198 mandates that merchant payment service providers obtain licenses and adopt risk controls to protect consumer and merchant funds. Digital growth continues as BSP pushes toward universal use The BSP's 2024 digital payments report highlights growing adoption across all user groups—from households to businesses and government agencies. With infrastructure improvements, regulatory safeguards, and a future-ready vision, the central bank aims to make digital payments not just widely available, but habitually used. 'We will continue to foster a digital finance ecosystem that is future-ready yet firmly grounded in trust, security, and consumer welfare. This means promoting innovation while maintaining the safeguards that protect users and ensure integrity across the system,' Remolona concluded. Watch | Philippine Blockchain Week 2025: Web3 innovation goes from hype to use case title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
GMA Network
5 days ago
- Business
- GMA Network
PH payments position swings to surplus in June 2025
The Philippine payments position swung to a surplus in June due to the national government's foreign currency deposits with the Bangko Sentral ng Pilipinas (BSP) and the central bank's investments. Data released by the BSP on Friday showed the country's balance of payments (BOP) stood at a surplus of $226 million in June 2025. This was a reversal from the $155-billion deficit recorded in June 2024. The payments position takes into account Philippine transactions with the rest of the world during a specific period. A surplus means more funds entered the country, while a deficit means more funds exited. 'The BOP surplus reflected the foreign currency deposits by the national government with the Bangko Sentral ng Pilipinas and income from BSP investments,' the central bank said. June's BOP surplus narrowed the year-to-date deficit from $5.8 billion in January to May 2025 to $5.6 billion in January to June 2025. 'Preliminary data indicate that the year-to-date BOP deficit was largely due to the continued trade in goods deficit. This decline was partly offset, however, by the sustained net inflows from personal remittances from overseas Filipinos, foreign borrowings by the national government, and foreign portfolio investments,' the BSP said. The BOP position mirrored the increase in the gross international reserves (GIR), which rose from $105.2 billion as of end-May 2025 to $106.0 billion by end-June 2025. 'The latest GIR level provides a robust external liquidity buffer, equivalent to 7.2 months' worth of imports of goods and payments of services and primary income,' the BSP said. 'Moreover, it covers about 3.4 times the country's short-term external debt based on residual maturity,' it added. The GIR are made up of foreign-denominated securities, foreign exchange, and other assets including gold. GIR helps a country finance its imports and foreign debt obligations, stabilize its currency, and provide a buffer against external economic shocks. — BAP, GMA Integrated News
GMA Network
6 days ago
- Business
- GMA Network
20% tax on interest income corrects ‘inequitable' system, says DOF
Banks this month started to implement the uniform 20% final withholding tax (FWT) on interest income, regardless of the term or currency denomination, in line with the passage of the Capital Markets Efficiency Promotion Act (CMEPA), signed into law by President Ferdinand 'Bongbong' Marcos Jr. The measure has gained public attention, perhaps due to confusion as several online posts have circulated online that it imposes a 20% tax on total savings or bank deposits. In a statement, the Department of Finance clarified that only the interest earned from a depositor's savings in a bank is taxed 20%, and not the amount of savings itself. 'Huwag maniwala sa fake news. Maging mapanuri sa mga articles at posts na kumakalat online na ginawa para magpakalat ng maling impormasyon,' the DOF said. (Do not believe fake news. Be critical of articles and posts circulating online that were made to spread false information.) Under CMEPA or Republic Act 122141 signed into law in May, all interest income deposited in banks are charged a 20% withholding tax, which local banks started to implement on July 1, 2025. 'A final tax of 20% is hereby imposed upon the amount of interest yield, or other monetary benefit earned or received from any currency bank deposit, deposit substitute, trust fund, or other similar arrangements,' Section 6 of the measure reads. The passage of CMEPA brought about amendments to several provisions of the National Internal Revenue Code, as it sought to 'harmonize' and simplify taxation of passive income across financial instruments and encourage wider public participation in the country's capital markets. Prior to the uniform rate, taxes were tiered and based on the maturity or lock-in periods — 20% for those less than three years; 12% for three years to less than four years; 5% for four years to less than five years; exemptions for more than five years; and 15% for foreign currency deposit units (FCDUs) or dollars. 'The CMEPA merely corrects this outdated and inequitable system that placed a heavier burden on ordinary Filipinos who do not have the extra cash to put in banks for longer periods,' the Department of Finance (DOF) said in a statement released Thursday. Citing estimates from the Bangko Sentral ng Pilipinas (BSP), the DOF said 99.6% of total deposits were already subject to the 20% tax rate, while 0.4% enjoyed preferential rates. 'This special tax treatment favored depositors who can afford to park their savings in long-term deposits, making the tax unfair for short-term depositors who face liquidity issues and need immediate access to their funds,' the DOF said. The finance department also clarified that the 20% rate will only be imposed on the interests earned, and not on the total savings or bank deposits. 'Hindi binubuwisan ang kabuuang halaga ng perang naka-deposito sa bangko. Sa halip, ang interes lamang na kinikita nito ang binubuwisan (The total amount deposited in banks is not taxed. Instead, only the interest earned is taxed),' it said in a separate post on its Facebook account. The DOF also clarified that the unified rate does not apply to provident savings programs under the Social Security System (SSS) and the Home Development Mutual Fund or Pag-IBIG such as the MP2, which are exempt from tax. Capital markets With the measure, the DOF is optimistic that more individuals will look to the capital markets, as it also reduced the stock transaction tax (STT) rate to 0.1% from 0.6% previously, and the documentary stamp taxes (DST) on original issuance of shares to 0.75% from 1%. It likewise removed the DST on collective investment schemes. It also imposes a uniform 0.75% DST on bonds, debentures, and certificates of stock or indebtedness issued in foreign countries, regardless of jurisdiction, which the government said reinforces neutrality in the tax system. 'These measures are seen to cut transaction costs, encourage market participation and financial planning, boost market liquidity, make the country's equities market regionally competitive, and increase capital market growth,' it said. CMEPA also provides an additional 50% tax deduction to the actual contributions of employers who contribute an amount equal to or greater than their employees' contributions to Personal Equity and Retirement Accounts (PERA). The DOF estimates CMEPA to generate P9.0-billion worth of revenues from 2025 to 2028, the end of the term of the current administration. It is expected to raise P500 million this year; P1.6 billion in 2026; P2.8 billion in 2027; and P4.1 billion in 2028. The government is looking to generate P4.520 trillion in 2025 and P4.983 trillion in 2026 based on the latest report of the Development Budget Coordination Committee (DBCC). — BM, GMA Integrated News
GMA Network
15-07-2025
- Business
- GMA Network
BSP mulls increase in Instapay's P50,000 limit per transaction
The Bangko Sentral ng Pilipinas (BSP) is looking to increase the P50,000 limit per transaction under the InstaPay electronic fund transfer payment system, given the increasing demand from the public, an official said Tuesday. According to BSP assistant governor Redentor 'Dennis' Bancod, the P50,000 limit per transaction was made to keep transactions below the radar of the Anti-Money Laundering Council (AMLC), as processing times for those above the threshold could take longer. 'Now with this clamor, the BSP is studying the implications of increasing that amount to a certain level," Bancod said in a panel during the Chamber of Thrift Banks Convention. "We know that in the other jurisdictions like Singapore, Malaysia, and Thailand, they already increased their limits on real-time instant payments, so in our case, we're also studying that,' he added. Launched in 2018, InstaPay allows individuals, businesses, and government institutions to send and receive funds or make payments in real time of up to P50,000 per transaction. Bancod said the central bank is also conducting a similar concurrent study involving another use case of InstaPay, which will be for transactions made between businesses. 'We recognize that most of these requests are actually for a business type of payment, like for SMEs (small and medium enterprises), commercial supply payments, and so on, so forth,' Bancod said. 'The automated clearing house of InstaPay under PPMI (Philippine Payments Management Inc.) is actually already working towards launching a B2B use case, and in that case, it will allow a bigger limit as long as the originator is a business corporation,' he added. –NB, GMA Integrated News
GMA Network
15-07-2025
- Business
- GMA Network
BSP wants level playing field among digital banks, 'digital-centric banks
The Bangko Sentral ng Pilipinas (BSP) is working on establishing guidelines that seek to level the playing field among digital banks and 'digital-centric' conventional banks aimed to be released in the next few months, a top official said Tuesday. According to BSP Deputy Governor Chuchi Fonacier, the BSP is now crafting the guidelines on the assessment of the level of digital centricity of thrift banks, rural banks, and cooperative banks. 'It aims to establish the indicators that will be considered in assessing the level of digital centricity of said banks, among others, to ensure proportionate application of said prudential requirements,' she said in her keynote speech during the Chamber of Thrift Banks Convention. 'This will be subject to a phased implementation of higher regulatory standards or requirements applicable to a digital bank, as determined by BSP. This approach promotes a level playing field and ensures consistent application of regulatory requirements and expectations between digital banks and digital-centric banks,' she added. Sought for more details, Fonacier said there should be a level playing field among digital banks and thrift, rural, and cooperative banks that are digitally centric. 'We just want to provide a level playing field kasi di ba (because) there are digital banks, and there are also digital-centric conventional banks, meaning the business model is digitally centric,' she told reporters in Makati City. 'We need to level the playing field, that's why we also would require some more, let's say, capital from those doing that,' she added. At present, the BSP allows up to 10 digital banks — defined as banks that offer financial products and services that are processed end-to-end through a digital platform and/or electronic channels with no physical branches — to operate in the country. To qualify, banks must meet the minimum capitalization of P1 billion, and will have to follow all the fiduciary rules imposed on other bank categories. It has so far granted licenses to six digital banks — GOTyme, Maya Bank, Overseas Filipino Bank (OFBank), Tonik Bank of Singapore, UNObank of Singapore, and UnionDigital of the Union Bank of the Philippines. Two additional banks have also signified their intent to convert or enter as digital banks — one operating rural bank, and another European financial institution. Fonacier on Tuesday said the BSP is also preparing guidance on the ethical use of artificial intelligence (AI) in the financial sector, also targeted to be released within the year. 'While AI is being embedded in the financial system, financial institutions should be alert when it comes to upholding data privacy, and confidentiality of data control,' she said. 'This will cover key areas such as ethical AI deployment, continuous improvement in AI's accuracy when making financial decisions, and rigorous management of algorithmic bias,' she added. — BAP, GMA Integrated News
