THE CENTRAL BANK is looking to test its planned e-payments platform to settle government transactions by yearend, as authorities prepare the shift to a cash-light economy by allowing fund transfers across banks and financial entities.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor A. Espenilla, Jr. said the main focus under the National Retail Payments System (NRPS) would be the planned electronic fund transfer scheme, which they eye to roll out by late 2016.
“We were hoping that before the end of the year we would have at least a pilot. We are engaging the Bankers’ Association [of the Philippines] to lead this but it’s not exclusively meant to be for banks only, so we have other accounts,” Mr. Espenilla told reporters.
“Our natural starting point would be encourage to government transactions to be executed in electronic transfers. These are all being discussed.”
Launched in 2015, the NRPS aims to guide financial transactions gradually away from cash and check-based payments to electronic schemes such as fund transfers and e-wallet disbursements. It also seeks to broaden financial inclusion by covering the unbanked and underserved areas through alternative and cheaper avenues for settlements.
At present, financial transactions of the government are coursed through the state-run Land Bank of the Philippines and the Development Bank of the Philippines through allotments and corresponding cash allocations as authorized by the Department of Budget and Management.
Among the key changes eyed by the central bank is the promotion of a “sender only pays” rule, where fund recipients can accept funds or payments without deductions under the NRPS, to be supported by multiple clearing and payment settlements under the Philippine Payments and Settlements System daily for the immediate credit of funds to receiver accounts.
E-commerce is seen to fast-track financial transactions, which would assist in improving efficiency and stability in the local financial system as the country also moves towards regional economic integration.
“Our primary focus is to operationalize the electronic fund transfer system. Basically, it’s bank account to bank account or other account to other account [transactions],” the official said.
Citing data from think tank Better than Cash Alliance, Mr. Espenilla earlier said the share of e-payments stood at a mere 1% of the total 2.5 billion payment transactions in a month. Migrating from paper-based to computer-based payment schemes could free up annual savings equal to about 1% of the economy, he said.