E-finance becomes necessity

With the community quarantine still in effect in the country since March due to the coronavirus disease pandemic, digital services and platforms became the primary means of transaction among Filipinos, where digital payments have become a necessity.

In a presentation during the 18th Development Policy Research Month (DPRM) virtual kickoff forum held recently, Bangko Sentral ng Pilipinas (BSP) assistant governor Iluminada Sicat said the BSP noted a marked increase in electronic fund transfers vis-à-vis automated teller machine withdrawals and check transactions from March to May.

Without a vaccine for COVID-19, she added that this increasing trend in digital transactions is expected to continue “even as lockdown measures are eased.”

Sicat mentioned that the government’s initiatives to digitize payments for social benefits, wages and transportation would boost digital payment platforms, adding the creation of a national ID system in the country is being pushed to establish a verifiable digital identity for Filipinos, “which will enable them to open bank accounts and gainfully participate in an increasingly digital economy.”

Local governments have also adopted various technologies to help their constituents.

Citing the 2019 Financial Inclusion Survey, Sicat said there are opportunities in the country that should be explored in promoting the use of digital payments in the Philippines.

In terms of mobile phone owners, only 12 percent of the 69 percent of adults who own a mobile phone use them for financial transactions. While only nine percent of the 53 percent of adults with Internet connection use it for financial transactions.

On the other hand, seven out of 10 unbanked adults have a mobile phone, “which represents an untapped opportunity for digital finance.”

While there have been developments and various initiatives from government and other key sectors in the utilization of e-finance, Sicat noted that “lack of awareness and trust remains to be the main barriers in the usage of mobile phone and internet for financial transactions.”