The Bangko Sentral ng Pilipinas (BSP) is aggressively pursuing a digital payments revolution in a bid to modernize the local financial landscape and boost economic growth.
The central bank has set an ambitious target of reaching 70 percent of all retail transactions in the Philippines through digital channels by 2028.
To achieve this goal, the BSP is introducing a series of innovative initiatives, including the imminent full launch of a request-to-pay feature for loading e-wallets using bank accounts.
This feature, facilitated through the real-time, low-value electronic transaction system InstaPay, is expected to significantly streamline the process of transferring funds between banks and e-wallets, making digital payments more accessible and convenient for Filipinos.
The BSP's efforts are already yielding positive results.
In 2023, digital transactions accounted for a substantial 52.8 percent of all monthly retail payments, surpassing the central bank's initial target of 50 percent. The total transaction value reached a staggering P6.1 trillion, reflecting a significant increase from the previous year's 42.1 percent share.
Broader digital transactions
Deputy Governor Mamerto Tangonan highlighted the potential benefits of broader digital payments adoption, emphasizing its ability to stimulate economic growth and reduce informality.
A report by the Bank for International Settlements supports this claim, finding that a 1 percentage point increase in digital payments is associated with a 0.1 percentage point increase in GDP per capita and a 0.06 percentage point decline in informal sector employment over two years.
Beyond the request-to-pay feature for e-wallet loading, the BSP is also working on other initiatives to promote digital payments.
These include the pilot launch of request-to-pay for direct debit this year, enabling bank clients to pay recurring obligations without needing multiple accounts.
In 2025, the BSP plans to introduce request-to-pay for e-commerce, allowing consumers to verify data and authorize payments to merchants digitally.
As the BSP continues to drive the adoption of digital payments, it is clear that the Philippines is on the cusp of a financial transformation.
By embracing technology and making digital transactions more accessible and convenient, the central bank is modernizing the country's financial system and laying the groundwork for a more inclusive and prosperous economy.
Digital transactions accounted for 52.8 percent of all monthly retail payments last year, exceeding the BSP target of 50 percent for the period as total transaction value reached P6.1 trillion. In 2022, the share of digital transactions was 42.1 percent.
Tangonan said payments to merchants represented the bulk or 64.9 percent of all digital fund transfers last year.
"Broader adoption of digital payments can boost economic growth and cut informality," he said. "We have to digitalize the other use cases where Filipinos still prefer to use cash. We want to have an alternative to transport payments that will solve transport service providers' lack of change to passengers," Tangonan said.
Apart from request-to-pay for loading e-wallets, Tangonan said the BSP will see the pilot for request-to-pay for direct debit this year. This enables bank clients to pay different recurring obligations, such as house and auto loans, without using multiple bank accounts.
In 2025, Tangonan said the BSP will launch the request-to-pay for e-commerce which allows consumers to verify relevant data and authorize creditors to digitally pay merchants.