BSP says it’s closely watching

The Bangko Sentral ng Pilipinas (BSP) is coordinating with other regulators overseas to be apprised of the intricacies of crowdfunding, whose platforms have tended to rise.

“Since the crowdfunding industry is still nascent in the Philippines, it may be not yet be the time to issue regulations. But we continue to monitor the crowdfunding industry and we’ll take regulatory action when the time comes,” BSP Governor Nestor A. Espenilla Jr. told reporters recently.

Espenilla said the situation started for charitable purposes and then later on evolved for credit and investments, but stressed that all these processes pass through proper vetting.

Crowdfunding means raisng money from a large number of people through a website for a project or a small business. Its platforms continue to increase since there are also a rising number of people who have funds and who want to partner with those who have expertise.

The central bank chief said the central bank was also “constantly surveying fintech activities of emerging market players.”

Fintech or financial technology is an innovation aimed at helping startups meet their possible funding source through the use of technology related to new applications, processes and business models, among others.

Espenilla said the BSP is also monitoring industry developments on crowdfunding and peer-to-peer lending.

“While crowdfunding clearly has a potential to expand financial access for new businesses and MSMEs, there’s also heightened risk of investor and consumer abuse,” he said.

He added that the BSP has shared with the Financial Stability Forum (FSF), its research on crowdfunding. /