MANILA&nbsp; -The benchmark interest rate of the Bangko Sentral ng Pilipinas (BSP) is expected to remain at 6.25 percent for the fourth policy meeting in a row when the Monetary Board convenes on Sept. 21.

ING Bank, based in The Netherlands, said in a commentary that the BSP will “likely stand pat as inflation pressures flare up.”

The latest monthly readout for headline inflation showed an uptick to 5.3 percent after six months of easing from 8.7 percent in January to 4.7 percent in July.

Goldman Sachs also expects the same, noting that despite the faster growth of prices last month, the BSP continues to expect inflation to ease back into its target band of 2 percent to 4 percent by October.

The American group also noted the BSP’s own caveat that this expectation is based on the premise that there will be no further supply shocks.

“While inflation risks remain skewed to the upside due to higher global food and energy prices, recent comments by the governor suggest another hike is not necessary at this time, although easing is not yet justified either,” Goldman Sachs said.

According to Robert Dan Roces, chief economist at Security Bank Corp., the BSP will consider inflation, economic growth, and external factors in making its decision.

“(T)he recent uptick in the August inflation alone is unlikely to prompt the BSP to resume tightening, recognizing the supply-side nature of the uptick and the fact that there would only be so much that monetary policy can do in such a situation, which requires fiscal complement,” Roces said.

“Looking ahead, inflation should still moderate in the coming months, but the BSP is unlikely to start easing policy until the middle of 2024, after the US Federal Reserve does so, he added.

Meanwhile, Pantheon Macroeconomics in the United Kingdom expects the BSP to start reducing the policy rate by 0.25 percentage point to 6 percent as early as November.

Pantheon Macroeconomics also expects another such rate cut in December to end the year at 5.75 percent.

During the Marcos administration’s economic team’s visit to Qatar on Sept. 10, BSP Deputy Governor Francisco Dakila Jr. said the central bank remained ready to secure the inflation target.

Dakila said the average inflation for 2023 is projected to settle at 5.6 percent, 3.3 percent in 2024 and 3.4 percent in 2025.

<h1>BSP tipped to keep rate at 6.25%</h1>MANILA&nbsp; -The benchmark interest rate of the Bangko Sentral ng Pilipinas (BSP) is expected to remain at 6.25 percent for the fourth policy meeting in a row when the Monetary Board convenes on Sept. 21.ING Bank, based in The Netherlands, said in a commentary that the BSP will “likely stand pat as inflation pressures flare up.”The latest monthly readout for headline inflation showed an uptick to 5.3 percent after six months of easing from 8.7 percent in January to 4.7 percent in July.Goldman Sachs also expects the same, noting that despite the faster growth of prices last month, the BSP continues to expect inflation to ease back into its target band of 2 percent to 4 percent by October.The American group also noted the BSP’s own caveat that this expectation is based on the premise that there will be no further supply shocks.“While inflation risks remain skewed to the upside due to higher global food and energy prices, recent comments by the governor suggest another hike is not necessary at this time, although easing is not yet justified either,” Goldman Sachs said.According to Robert Dan Roces, chief economist at Security Bank Corp., the BSP will consider inflation, economic growth, and external factors in making its decision.“(T)he recent uptick in the August inflation alone is unlikely to prompt the BSP to resume tightening, recognizing the supply-side nature of the uptick and the fact that there would only be so much that monetary policy can do in such a situation, which requires fiscal complement,” Roces said.“Looking ahead, inflation should still moderate in the coming months, but the BSP is unlikely to start easing policy until the middle of 2024, after the US Federal Reserve does so, he added.Meanwhile, Pantheon Macroeconomics in the United Kingdom expects the BSP to start reducing the policy rate by 0.25 percentage point to 6 percent as early as November.Pantheon Macroeconomics also expects another such rate cut in December to end the year at 5.75 percent.During the Marcos administration’s economic team’s visit to Qatar on Sept. 10, BSP Deputy Governor Francisco Dakila Jr. said the central bank remained ready to secure the inflation target.Dakila said the average inflation for 2023 is projected to settle at 5.6 percent, 3.3 percent in 2024 and 3.4 percent in 2025.

Banks / Credit unions

BSP tipped to keep rate at 6.25%

MANILA&nbsp; -Despite a disappointing second quarter output, Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. expects the domestic economy to pick up pace and attain a full-year growth rate of 6 percent, the lower end of the government’s target range for 2023.

In a chat with business editors on Tuesday night, Remolona said while 7 percent, the upper end of the target, may no longer be feasible, “we think it (growth) would hit 6 percent.”

One distinct factor that had caused the country’s second quarter gross domestic product (GDP) growth rate to soften to 4.3 percent, Remolona explained, was government underspending, which was now being addressed.

Iluminada Sicat, senior assistant governor of the Monetary Policy Sub-sector, noted that the Department of Budget and Management had committed to push various agencies to “fast-track their expenditures in accordance with the 2023 budget.”

One of the underspending government agencies is the Department of Social Welfare and Development, Sicat noted, but only because it was cleaning up its database of Pantawid Pamilyang Pilipino Program or 4Ps.

Patterned after the conditional cash transfer scheme implemented in other developing countries, the 4Ps program provides cash grants to beneficiaries provided that they comply with the set of conditions.

“Once everything has been validated and verified, then disbursement of&nbsp;ayuda&nbsp;(cash support) to relevant population will be fast-tracked,” Sicat said.

In 2022, the Philippine GDP grew by 7.6 percent, exceeding the government’s target of 6.5 to 7.5 percent. This was the fastest pace seen since 1976 and made the country one of the best-performing economies in Southeast Asia.&nbsp; 

Asked about whether he shares the concern of some economists on the widening of the current account deficit, Remolona said the big surplus recorded in previous years had been due to underinvestment.

<h1>Philippines may still grow by 6% this year, says Remolona </h1>MANILA&nbsp; -Despite a disappointing second quarter output, Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. expects the domestic economy to pick up pace and attain a full-year growth rate of 6 percent, the lower end of the government’s target range for 2023.In a chat with business editors on Tuesday night, Remolona said while 7 percent, the upper end of the target, may no longer be feasible, “we think it (growth) would hit 6 percent.”One distinct factor that had caused the country’s second quarter gross domestic product (GDP) growth rate to soften to 4.3 percent, Remolona explained, was government underspending, which was now being addressed.Iluminada Sicat, senior assistant governor of the Monetary Policy Sub-sector, noted that the Department of Budget and Management had committed to push various agencies to “fast-track their expenditures in accordance with the 2023 budget.”One of the underspending government agencies is the Department of Social Welfare and Development, Sicat noted, but only because it was cleaning up its database of Pantawid Pamilyang Pilipino Program or 4Ps.Patterned after the conditional cash transfer scheme implemented in other developing countries, the 4Ps program provides cash grants to beneficiaries provided that they comply with the set of conditions.“Once everything has been validated and verified, then disbursement of&nbsp;ayuda&nbsp;(cash support) to relevant population will be fast-tracked,” Sicat said.In 2022, the Philippine GDP grew by 7.6 percent, exceeding the government’s target of 6.5 to 7.5 percent. This was the fastest pace seen since 1976 and made the country one of the best-performing economies in Southeast Asia.&nbsp; Asked about whether he shares the concern of some economists on the widening of the current account deficit, Remolona said the big surplus recorded in previous years had been due to underinvestment.

Financial results announcement

Philippines may still grow by 6% this year, says Remolona  

Stock market investors will be bracing for the Bangko Sentral ng Pilipinas’ (BSP) next policy meeting on Thursday while digesting a steady stream of second quarter corporate earnings.

This comes as the benchmark Philippine Stock Exchange index (PSEi) continued its downtrend after the government released last week disappointing economic growth data for the second quarter. The PSEi lost 0.7 percent to 6,405.91 from the previous week.

Michael Ricafort, chief economist at the Rizal Commercial Banking Corp., said the PSEi was resting just above the major support zone of 6,400 to 6,250. He pegged the key resistance areas for the PSEi at 6,730 to 6,830.

The BSP Monetary Board will have several data points to consider in the upcoming interest rate setting meeting.

The chief consideration among these was the recent July inflation report showing inflation cooling for six straight months to 4.7 percent.

HSBC Asean economist Aris Dacanay maintained their expectation that the BSP would keep its policy rate stable at 6.25 percent on Aug. 17.

“Although [the second quarter Philippine economic] growth surprised to the downside, we think risks to the inflation and policy rate outlooks are to the upside,” Dacanay said.

“To some extent, growth cooling may also support macroeconomic stability and domestic balance … Although marginally improving, the national saving rate has not normalized to prepandemic levels while investment continues to be robust,” he said.

&nbsp; “This imbalance may then require a tight monetary stance to help rein in demand, incentivize saving and bring the domestic economy back to balance,” he added.

<h1>Investors look to BSP buffer after anticlimactic economic growth </h1>Stock market investors will be bracing for the Bangko Sentral ng Pilipinas’ (BSP) next policy meeting on Thursday while digesting a steady stream of second quarter corporate earnings.This comes as the benchmark Philippine Stock Exchange index (PSEi) continued its downtrend after the government released last week disappointing economic growth data for the second quarter. The PSEi lost 0.7 percent to 6,405.91 from the previous week.Michael Ricafort, chief economist at the Rizal Commercial Banking Corp., said the PSEi was resting just above the major support zone of 6,400 to 6,250. He pegged the key resistance areas for the PSEi at 6,730 to 6,830.The BSP Monetary Board will have several data points to consider in the upcoming interest rate setting meeting.The chief consideration among these was the recent July inflation report showing inflation cooling for six straight months to 4.7 percent.HSBC Asean economist Aris Dacanay maintained their expectation that the BSP would keep its policy rate stable at 6.25 percent on Aug. 17.“Although [the second quarter Philippine economic] growth surprised to the downside, we think risks to the inflation and policy rate outlooks are to the upside,” Dacanay said.“To some extent, growth cooling may also support macroeconomic stability and domestic balance … Although marginally improving, the national saving rate has not normalized to prepandemic levels while investment continues to be robust,” he said.&nbsp; “This imbalance may then require a tight monetary stance to help rein in demand, incentivize saving and bring the domestic economy back to balance,” he added.

Survey report

Investors look to BSP buffer after anticlimactic economic growth  

MANILA — Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona said the central bank would only raise rates if there were new supply shocks on inflation.&nbsp;

Remolona made the statement in an interview with Nomura economist Euben Paracuelles

“If we have new supply shocks on inflation, which are unusually large, and if El Niño turns out to be very severe and combined with a confluence of other factors, we would have to tighten again,” the BSP governor said when asked what would trigger a resumption of the hiking cycle.

“Headline inflation is at 4.7 percent year-on-year, and we want to get to the target of 2 to 4 percent. But we also want to be comfortable that inflation is staying within that range and inflation expectations remain anchored,” he noted.

“If we don’t tighten when those shocks materialize, then expectations could get out of hand, inflation will feed on itself, and it gets much harder for us,” he explained.

Asked if policy settings would be kept stable if no supply shocks happen, Remolona said, “The pause means the signals from the data are still mixed and not consistent. Some indicators show the economy is holding up, some show it is weakening.”

“If this continues, then it’s likely prudent for us to still pause,” he said.

Remolona said the BSP would be cautious about cutting rates.

“If there’s a chance that we might have to raise rates again after we start cutting, we don’t want to take the risk from these quick reversals. I think the exit has to be a smooth process and this is what central banks have learned over the years. Sudden reversals are bad,” he said.

Inflation further eased for a sixth consecutive month in July. The BSP has said it remained ready to adjust the monetary policy stance if necessary to ease price pressures.

Easing inflation has allowed the BSP to keep rates steady at 6.25 percent during its last policy-setting meeting. The next meeting is on August 17.

<h1>BSP says may hike rates if...</h1>MANILA — Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona said the central bank would only raise rates if there were new supply shocks on inflation.&nbsp;Remolona made the statement in an interview with Nomura economist Euben Paracuelles“If we have new supply shocks on inflation, which are unusually large, and if El Niño turns out to be very severe and combined with a confluence of other factors, we would have to tighten again,” the BSP governor said when asked what would trigger a resumption of the hiking cycle.“Headline inflation is at 4.7 percent year-on-year, and we want to get to the target of 2 to 4 percent. But we also want to be comfortable that inflation is staying within that range and inflation expectations remain anchored,” he noted.“If we don’t tighten when those shocks materialize, then expectations could get out of hand, inflation will feed on itself, and it gets much harder for us,” he explained.Asked if policy settings would be kept stable if no supply shocks happen, Remolona said, “The pause means the signals from the data are still mixed and not consistent. Some indicators show the economy is holding up, some show it is weakening.”“If this continues, then it’s likely prudent for us to still pause,” he said.Remolona said the BSP would be cautious about cutting rates.“If there’s a chance that we might have to raise rates again after we start cutting, we don’t want to take the risk from these quick reversals. I think the exit has to be a smooth process and this is what central banks have learned over the years. Sudden reversals are bad,” he said.Inflation further eased for a sixth consecutive month in July. The BSP has said it remained ready to adjust the monetary policy stance if necessary to ease price pressures.Easing inflation has allowed the BSP to keep rates steady at 6.25 percent during its last policy-setting meeting. The next meeting is on August 17.

BSP says may hike rates if...

MANILA - The Bangko Sentral ng Pilipinas said on Tuesday over P18 million worth of coins have been collected through its coin deposit machines (CoDMs) since their deployment last month.

According to BSP data, the total value deposited as of July 30 is at P18,069,492.56 equivalent to 8,787,059 pieces of coins.

Deposited coins are directly credited to GCash wallets or converted into shopping vouchers, the central bank earlier said.&nbsp;

Coin deposit machines deployed in Manila, Pasay, and Muntinlupa malls were a hit, with retailers even designating a queuing space for depositors, the BSP said.&nbsp;

Due to the warm reception, the BSP is working on deploying additional 15 coin deposit machines in Metro Manila, said Deputy Governor Bernadette Romulo Puyat.

This is in addition to 10 CoDMs in currently in operation.

“This is to address the artificial coin shortage. Instead na nasa bahay lang nila, para maibalik sa circulation,” Romulo-Puyat said.

BSP is working on adding more e-wallet platforms to the project as 98 percent of depositors opted to credit their coin deposits to their e-wallet accounts.&nbsp;

Retailers who have signed with BSP on the project are SM Store, Robinsons Supermarket, and Festival Mall.

<h1>BSP coin deposit machines collect over P18 million as of July 30</h1>MANILA - The Bangko Sentral ng Pilipinas said on Tuesday over P18 million worth of coins have been collected through its coin deposit machines (CoDMs) since their deployment last month.According to BSP data, the total value deposited as of July 30 is at P18,069,492.56 equivalent to 8,787,059 pieces of coins.Deposited coins are directly credited to GCash wallets or converted into shopping vouchers, the central bank earlier said.&nbsp;Coin deposit machines deployed in Manila, Pasay, and Muntinlupa malls were a hit, with retailers even designating a queuing space for depositors, the BSP said.&nbsp;Due to the warm reception, the BSP is working on deploying additional 15 coin deposit machines in Metro Manila, said Deputy Governor Bernadette Romulo Puyat.This is in addition to 10 CoDMs in currently in operation.“This is to address the artificial coin shortage. Instead na nasa bahay lang nila, para maibalik sa circulation,” Romulo-Puyat said.BSP is working on adding more e-wallet platforms to the project as 98 percent of depositors opted to credit their coin deposits to their e-wallet accounts.&nbsp;Retailers who have signed with BSP on the project are SM Store, Robinsons Supermarket, and Festival Mall.

BSP coin deposit machines collect over P18 million as of July 30

MANILA&nbsp; -Personal remittances from overseas Filipino workers (OFW) increased by 2.9 percent to reach $2.78 billion in May from $2.7 billion in the same month last year amid a strong adoption of digital transfer platforms.

The growth of inflows in May was faster than the 2 percent observed in the same month of 2022, but slower than the 3.8 percent recorded a month earlier in April.

The Bangko Sentral ng Pilipinas (BSP) attributed the continued growth in May to increases in inbound money transfers from both land-based and sea-based overseas.

Also, the May readout brought the total for the first five months of this year to $14.46 billion, an increase of 3.1 percent from $14.02 billion in January-May 2022.

Five-month growth this year was faster than 2.5 percent recorded for the same period of 2022.

Of total remittances, transfers coursed through banks increased by 2.8 percent to $2.49 billion from $2.43 billion. Transfers mostly came from the United States, Singapore and Saudi Arabia.

Earl Melivo, head of WorldRemit in the Asia-Pacific region, said in an interview with the Inquirer that remittances were poised to keep growing even if the global alert on COVID-19 being a pandemic has been lifted and economies are normalizing.

“This doesn’t affect remittances at all [because] the host countries [of overseas Filipinos] have already opened up or relaxed their restrictions, probably starting two years ago,” Melivo said.

He said that, in fact, what’s helping keep remittances growing was the continuing expansion of transfer made digitally.

“In the last three years, we’ve seen rapid growth [in the use of] mobile wallets,” Melivo said. “One of the silver linings of this pandemic is we’re all forced to go digital. So even on the receiving side, those who used to receive via cash, are now actually conveniently receiving them 24/7 through mobile wallets.”

Even then, he said bank transfers continue to go strong because banks were more flexible now more than ever. 

“It’s quite easier for you to open a bank account now, even digital ones,” Melivo said. “So we’re seeing a lot more volumes going to bank accounts in the Philippines.”&nbsp;

<h1>OFW remittances up 3% in May, hit $2.78B </h1>MANILA&nbsp; -Personal remittances from overseas Filipino workers (OFW) increased by 2.9 percent to reach $2.78 billion in May from $2.7 billion in the same month last year amid a strong adoption of digital transfer platforms.The growth of inflows in May was faster than the 2 percent observed in the same month of 2022, but slower than the 3.8 percent recorded a month earlier in April.The Bangko Sentral ng Pilipinas (BSP) attributed the continued growth in May to increases in inbound money transfers from both land-based and sea-based overseas.Also, the May readout brought the total for the first five months of this year to $14.46 billion, an increase of 3.1 percent from $14.02 billion in January-May 2022.Five-month growth this year was faster than 2.5 percent recorded for the same period of 2022.Of total remittances, transfers coursed through banks increased by 2.8 percent to $2.49 billion from $2.43 billion. Transfers mostly came from the United States, Singapore and Saudi Arabia.Earl Melivo, head of WorldRemit in the Asia-Pacific region, said in an interview with the Inquirer that remittances were poised to keep growing even if the global alert on COVID-19 being a pandemic has been lifted and economies are normalizing.“This doesn’t affect remittances at all [because] the host countries [of overseas Filipinos] have already opened up or relaxed their restrictions, probably starting two years ago,” Melivo said.He said that, in fact, what’s helping keep remittances growing was the continuing expansion of transfer made digitally.“In the last three years, we’ve seen rapid growth [in the use of] mobile wallets,” Melivo said. “One of the silver linings of this pandemic is we’re all forced to go digital. So even on the receiving side, those who used to receive via cash, are now actually conveniently receiving them 24/7 through mobile wallets.”Even then, he said bank transfers continue to go strong because banks were more flexible now more than ever. “It’s quite easier for you to open a bank account now, even digital ones,” Melivo said. “So we’re seeing a lot more volumes going to bank accounts in the Philippines.”&nbsp;

OFW remittances up 3% in May, hit $2.78B  

MANILA&nbsp; -The net inflow of foreign direct investments (FDI) into the Philippines shrank by 14 percent to $876 million in April from $1 billion in the same month of 2022 as expectations of weaker economic growth continued to dampen the movement of capital.

The April readout was a sharp reversal of a 53-percent growth seen in the same month of 2022. However, this may also be seen as an improvement from the 31-percent drop recorded a month earlier last March.

This was the second month in a row that net inflows decreased or since $1.05 billion in February.

“The decline in FDI [in April] may be attributed to concerns over slowing economic growth and relatively high inflation levels globally,” the Bangko Sentral ng Pilipinas (BSP) said in a statement.

The biggest component of FDI inflows—net investment in debt instruments—dropped by 7.7 percent to $663 million from $718 million.

Also, net equity capital other than the reinvestment of earnings plunged by 33.8 percent to $136 million from $206 million, decreasing for the sixth month in a row.

Further, reinvestment of capital decreased for the third straight month, by 19.4 percent to $77 million from $95 million.

The BSP keeps FDI data that represent capital which actually moved, instead of pledged or planned investments that may or may not be realized.

Equity capital placements in April mostly came from Japan, the United States and Singapore.

These were invested mainly in the industries of manufacturing; real estate; and financial and insurance sectors.

For the January-April period, net inflows dropped by 18 percent to $2.9 billion from $3.6 billion in the same period last year.

For the four-month period, all three components similarly showed a decline, with net investment in debt instruments sliding 18 percent to $2.24 billion from $2.75 billion.

Net equity capital other than the reinvestment of earnings fell by 23 percent to $397 million from $517 million.

Reinvestment of capital was decreased by 6.6 percent to $279 million from $299 million.

BMI, a Fitch Solutions company, forecasts that the Philippine economy will grow by 5.9 percent in 2023.

“The lagged impact of interest rate hikes will weigh more heavily on domestic activity, while weakness in external demand will drag on Philippine exports,” BMI said in a commentary.

“Our forecast implies that we are expecting real GDP (gross domestic product) growth to remain on a slowing trend over the coming quarters [after 6.4 percent in the first quarter this year from 8 percent in the same period last year],” it added.

BMI thinks that the Philippine economy will continue to slow due to in part to high interest rates that drag on investment appetite as well as tepid global demand.

<h1>Net FDI inflow shrank 14% to $876M in April </h1>MANILA&nbsp; -The net inflow of foreign direct investments (FDI) into the Philippines shrank by 14 percent to $876 million in April from $1 billion in the same month of 2022 as expectations of weaker economic growth continued to dampen the movement of capital.The April readout was a sharp reversal of a 53-percent growth seen in the same month of 2022. However, this may also be seen as an improvement from the 31-percent drop recorded a month earlier last March.This was the second month in a row that net inflows decreased or since $1.05 billion in February.“The decline in FDI [in April] may be attributed to concerns over slowing economic growth and relatively high inflation levels globally,” the Bangko Sentral ng Pilipinas (BSP) said in a statement.The biggest component of FDI inflows—net investment in debt instruments—dropped by 7.7 percent to $663 million from $718 million.<h2>Net equity capital</h2>Also, net equity capital other than the reinvestment of earnings plunged by 33.8 percent to $136 million from $206 million, decreasing for the sixth month in a row.Further, reinvestment of capital decreased for the third straight month, by 19.4 percent to $77 million from $95 million.The BSP keeps FDI data that represent capital which actually moved, instead of pledged or planned investments that may or may not be realized.Equity capital placements in April mostly came from Japan, the United States and Singapore.<h2>18-percent drop</h2>These were invested mainly in the industries of manufacturing; real estate; and financial and insurance sectors.For the January-April period, net inflows dropped by 18 percent to $2.9 billion from $3.6 billion in the same period last year.For the four-month period, all three components similarly showed a decline, with net investment in debt instruments sliding 18 percent to $2.24 billion from $2.75 billion.Net equity capital other than the reinvestment of earnings fell by 23 percent to $397 million from $517 million.Reinvestment of capital was decreased by 6.6 percent to $279 million from $299 million.BMI, a Fitch Solutions company, forecasts that the Philippine economy will grow by 5.9 percent in 2023.“The lagged impact of interest rate hikes will weigh more heavily on domestic activity, while weakness in external demand will drag on Philippine exports,” BMI said in a commentary.“Our forecast implies that we are expecting real GDP (gross domestic product) growth to remain on a slowing trend over the coming quarters [after 6.4 percent in the first quarter this year from 8 percent in the same period last year],” it added.BMI thinks that the Philippine economy will continue to slow due to in part to high interest rates that drag on investment appetite as well as tepid global demand.

Net FDI inflow shrank 14% to $876M in April 

Digitalization efforts in the Philippine payments system are on track to meet the target of converting half of total retail payments into digital form in 2023, according to the Bangko Sentral ng Pilipinas (BSP).

The BSP said in a report titled 2022 Status of Digital Payments that as of last year, digital platforms accounted for an overall share of 42 percent of the number of all transactions that year, rising from 30 percent in the previous year.

In terms of value, digital payments represented 40 percent of all transactions, declining from 44 percent in 2021.

In the report, the BSP pegged total transactions at $195 billion, of which $78.17 billion were done digitally.

“The latest results show that we are steering in the right direction as we move closer to our goal of converting at least half of total retail payments volume into digital form by the end of 2023 under the BSP Digital Payments Transformation Roadmap,” outgoing BSP Governor Felipe Medalla in a statement sent out on Friday night.

Medalla said the numbers show the deliberate reforms and initiatives that the BSP and the government undertook were responsive to the shifting needs of the public toward more efficient payments services.

“Since the pandemic, which broadened digital payments adoption and acceptance, the upward trajectory of digital payment usage has been sustained,” he said. “We need to carry on to maintain this trend, focusing on the overall value-adding experience of using digital payments.”

As the party doing the payment, the government was the “most cash-lite” as it made 96 percent of all its payments digitally.

The two other types of payors—individuals and businesses—did so in 55 percent and 10 percent of the time, respectively.

In terms of value, 63 percent or $47.6 billion of payments by individuals were done through digital channels.

Businesses paid digitally at $19.78 billion or 18 percent of total transaction value while the government had $10.75 billion or 98 percent of total.

The BSP noted that merchant payments, person-to-person (P2P) transfers, and salaries and wage payments were the top contributors to the increasing adoption of digital payments.

The regulator added that such results were aligned with the latest BSP Financial Inclusion Survey Report, which found a significant increase in ownership of transaction accounts, majority of which are e-money accounts, and that more of these accounts are now being used for payments.

<h1>PH set to hit digital payments target</h1>Digitalization efforts in the Philippine payments system are on track to meet the target of converting half of total retail payments into digital form in 2023, according to the Bangko Sentral ng Pilipinas (BSP).The BSP said in a report titled 2022 Status of Digital Payments that as of last year, digital platforms accounted for an overall share of 42 percent of the number of all transactions that year, rising from 30 percent in the previous year.In terms of value, digital payments represented 40 percent of all transactions, declining from 44 percent in 2021.In the report, the BSP pegged total transactions at $195 billion, of which $78.17 billion were done digitally.“The latest results show that we are steering in the right direction as we move closer to our goal of converting at least half of total retail payments volume into digital form by the end of 2023 under the BSP Digital Payments Transformation Roadmap,” outgoing BSP Governor Felipe Medalla in a statement sent out on Friday night.Medalla said the numbers show the deliberate reforms and initiatives that the BSP and the government undertook were responsive to the shifting needs of the public toward more efficient payments services.“Since the pandemic, which broadened digital payments adoption and acceptance, the upward trajectory of digital payment usage has been sustained,” he said. “We need to carry on to maintain this trend, focusing on the overall value-adding experience of using digital payments.”As the party doing the payment, the government was the “most cash-lite” as it made 96 percent of all its payments digitally.The two other types of payors—individuals and businesses—did so in 55 percent and 10 percent of the time, respectively.In terms of value, 63 percent or $47.6 billion of payments by individuals were done through digital channels.Businesses paid digitally at $19.78 billion or 18 percent of total transaction value while the government had $10.75 billion or 98 percent of total.The BSP noted that merchant payments, person-to-person (P2P) transfers, and salaries and wage payments were the top contributors to the increasing adoption of digital payments.The regulator added that such results were aligned with the latest BSP Financial Inclusion Survey Report, which found a significant increase in ownership of transaction accounts, majority of which are e-money accounts, and that more of these accounts are now being used for payments.

PH set to hit digital payments target

THE Bangko Sentral ng Pilipinas (BSP) on Wednesday officially launched the Open Finance PH pilot to promote financial inclusion and collaboration among financial institutions.

This initiative will assist unbanked people in developing a financial profile and credit history, allowing them to have access to loans and other services that were previously unavailable to them.

"The Pilot is a voluntary undertaking of financial institutions to co-develop an open, interoperable and scalable ecosystem that empowers consumers to take more control over their financial data and enable them to access a range of financial products and services from different providers," the BSP said in a statement.

The central bank said the Pilot will be open to eligible BSP-Supervised Financial Institutions. This is the next stage in the execution of the Revised Open Finance Roadmap (2023-2027), which outlines the BSP's revised priority activities in the country's adoption of open finance.

"With Open Finance PH, we are taking a big step toward unlocking equal access to financial services for all Filipinos and building a cyber-resilient and open digital economy," said BSP Governor Felipe Medalla.

The central bank also announced the official start of registration for the Open Finance PH Pilot, which is based on the recommendation of the Open Finance Oversight Committee Transition Group and a sub-working group.

"The Open Finance PH Pilot, which will operate through the support of the IFC (International Finance Corp.), will inform the development of open finance technical and operational standards and arrangements," the BSP said.

"For existing bank customers and micro, small and medium enterprises (MSMEs), this opens up a world of products and services that better suit their needs, from tailored payment schemes to hyper-personalized investment recommendations," it added.

The central bank emphasized that this initiative gives MSMEs more control over their data, "as they will have to give consent before their information is shared."

Accordingly, banks, fintech (finacial technology) firms and other third-party providers may more effectively analyze credit risk, lowering costs and opening up new income sources. It will be easier to increase the client's lifetime value.

"This puts the Philippines on the map when it comes to open finance," said Jean-Marc Arbogast, country manager for IFC Philippines.

"It positions the country right alongside more advanced markets like Singapore, the United Kingdom and the European Union, all of whom catalyzed innovation by championing open banking initiatives," Arbogast added.

<h1>BSP launches Open Finance PH pilot</h1>THE Bangko Sentral ng Pilipinas (BSP) on Wednesday officially launched the Open Finance PH pilot to promote financial inclusion and collaboration among financial institutions.This initiative will assist unbanked people in developing a financial profile and credit history, allowing them to have access to loans and other services that were previously unavailable to them."The Pilot is a voluntary undertaking of financial institutions to co-develop an open, interoperable and scalable ecosystem that empowers consumers to take more control over their financial data and enable them to access a range of financial products and services from different providers," the BSP said in a statement.The central bank said the Pilot will be open to eligible BSP-Supervised Financial Institutions. This is the next stage in the execution of the Revised Open Finance Roadmap (2023-2027), which outlines the BSP's revised priority activities in the country's adoption of open finance."With Open Finance PH, we are taking a big step toward unlocking equal access to financial services for all Filipinos and building a cyber-resilient and open digital economy," said BSP Governor Felipe Medalla.The central bank also announced the official start of registration for the Open Finance PH Pilot, which is based on the recommendation of the Open Finance Oversight Committee Transition Group and a sub-working group."The Open Finance PH Pilot, which will operate through the support of the IFC (International Finance Corp.), will inform the development of open finance technical and operational standards and arrangements," the BSP said."For existing bank customers and micro, small and medium enterprises (MSMEs), this opens up a world of products and services that better suit their needs, from tailored payment schemes to hyper-personalized investment recommendations," it added.The central bank emphasized that this initiative gives MSMEs more control over their data, "as they will have to give consent before their information is shared."Accordingly, banks, fintech (finacial technology) firms and other third-party providers may more effectively analyze credit risk, lowering costs and opening up new income sources. It will be easier to increase the client's lifetime value."This puts the Philippines on the map when it comes to open finance," said Jean-Marc Arbogast, country manager for IFC Philippines."It positions the country right alongside more advanced markets like Singapore, the United Kingdom and the European Union, all of whom catalyzed innovation by championing open banking initiatives," Arbogast added.