BSP backs opening of telco sector to support fintech

The Bangko Sentral ng Pilipinas (BSP) is supporting the opening of the country’s telecommunications sector as technological developments have significantly changed the business of banking and finance.

BSP Governor Nestor Espenilla Jr. said the opening up of the telecommunication industry would benefit the whole financial system.

“The BSP fully supports an initiative to open up the telco business so that there will be more competition and better service delivery which will benefit the whole financial system,” he said.

Espenilla said the take off of the digital financial services in the Philippines has been hampered by the lack of competition in the telecom sector.

“Personally, I see a lot of value in liberalizing that as well. It is a pain point for our approach of promoting digital delivery of financial services because of infrastructural issues,” he said.

The BSP chief pointed out one of the reasons why digital financial services have not taken off in the country is the trust issue.

“The trust issue is partly founded on the matter of reliability of services. So even though there is capability, if it cannot be depended upon then people will hesitate to move to a different way of doing financial services,” he said.

Last year, President Duterte announced plans to open up the country’s telecom, energy as well as information and communications technology sectors to more players, including foreigners, to improve competitiveness.

The major players in the country’s telecom industry are PLDT Inc. and Ayala-led Globe Telecom Inc.

Espenilla said the BSP would continue to pursue policies and regulations that encourage the growth of a progressive and inclusive financial infrastructure or FINfrastructure.

“At the BSP, our agenda on FINfrastructure focuses on financial sector and market infrastructure reforms that aim to enhance access to credit and other financial services, deepen local currency debt and foreign exchange markets, and digitalize our financial system,” he said.

Retail financial services are further being digitized via mobile wallets, payment applications, robo-advisors, equity crowd-funding platforms for access to private and alternative investment opportunities, and online lending platforms.

The BSP is actively leading industry-wide initiatives to operationalize the national retail payment system (NRPS) to enable customers to make payments and transfer funds between and among accounts using any digital device.

Banks have incorporated the Philippine Payments Management Inc. while two priority automated clearing houses (ACHs), the Batch Credit Push EFT called PesoNet and the Real-time EFT Credit called InstaPay would be launched in November.