MANDATING BUSINESSES to adopt digital payment solutions for transactions could help promote financial inclusion and stoke economic activity as it could stimulate consumer spending, analysts said on Tuesday.
“Mandating the adoption of digital payment services in government and merchant transactions has strong potential to promote financial inclusion in Philippines,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.
“Digital payment systems streamline processes, reducing the time, cost, and inefficiencies associated with cash-based transactions… [and] enables seamless transactions, encouraging consumer spending,” Mr. Rivera said.
The government of President Ferdinand R. Marcos, Jr. has made digitalization a cornerstone of his administration’s agenda under the Philippine Development Plan 2023-2028, including the adoption of digital payment systems.
The Bangko Sentral ng Pilipinas (BSP) is looking to digitalize at least 60% of all retail payments by 2028, in line with the government’s agenda.
A 2023 report by the BSP showed that only 56% of Filipinos have formal bank accounts, while 76% of Filipinos have internet access and own mobile phones.
Measures seeking to boost the adoption of digital payment systems are pending in the Philippine Congress. House Bill No. 8262 is awaiting second reading approval, while its counterpart Senate bills remain pending at the Senate committee on banks.
“The measure could significantly promote financial inclusion by making financial services more accessible to underserved and unbanked populations, enabling them to participate in the digital economy,” Jonathan L. Ravelas, senior adviser at professional service firm Reyes Tacandong & Co., said in a Viber message.
However, lawmakers should ensure the country’s digital payment infrastructure is “robust, secure and accessible” to help achieve the proposed law’s goal of boosting the adoption of digital payment schemes, Mr. Rivera said.
“[It’s] equally important to ensure greater telecommunications or data coverage to more areas around the country, especially in rural areas that have no or weak signals, thereby helping boost more online business transactions,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Public awareness campaigns regarding the benefits of adopting digital payment systems for merchants and consumers alike would help improve the bills’ effectiveness, said Mr. Rivera. “The success of this measure hinges on the ability of citizens, merchants, and government employees to understand and use digital payment systems.”
