MANILA, Philippines – Working towards digitalization, the Bangko Sentral ng Pilipinas (BSP) seeks to remove fees for small-value fund transfers to encourage more Filipinos to turn to digital payments and create a cash-lite economy.
The BSP’s agenda also aims to make digitalization more inclusive, as fees usually charged for these small transactions come from a regular employee’s hard-earned money and could be saved instead.
“If the fee is P15 for a P200 transaction, then the fee is quite large relative to the amount being sent,” BSP Governor Felipe Medalla said in a tweet on Feb. 24.
Medalla also said that the BSP is “ready to work with the industry to find ways to eliminate fees on small-value fund transfers and incentivize more Filipinos to use digital payments.”
During the Annual Reception for the Banking Community with the theme “A Future-Ready Philippines: Digital, Sustainable, and Inclusive”, Medalla brought up collaborating efforts to explore on cost-sharing.
“And I’m sure, with the way that we’re able to work together in the past, we, the BSP, and our partners in the banking system will be able to work together to find a cost-sharing system that excludes small payments from fees, provided it’s below a certain number of transactions, let’s say, three, three per day. And there is a way of sharing costs,” Medalla said.
He also touched on the reserve requirement ratio (RRR) for banks, which is the level of funds banks are required to keep with the BSP, which is currently at 12 percent.
“We may even consider cutting the reserve requirement to enable banks to make these concessions. After all, the true measure of an effective policy lies not in its complexity but in its ability to bring those at the margins into the fold,” Medalla said.
“I promise you, the central bank, will be in a greater hurry to cut reserve requirements so you can afford to give those (concessions),” he added.
The BSP aims to reduce the country’s RRR to a single digit by 2023.