The Bangko Sentral ng Pilipinas (BSP) is taking bold steps to promote a cash-lite economy by proposing the removal of service fees for certain electronic fund transfers. The initiative, outlined in a draft circular, aims to make person-to-person transfers and payments to micro, small, and medium enterprises (MSMEs) free of charge.
BSP’s Push for Adoption of Cash-Lite
Under the proposed rules, set to take effect on April 1, 2025, personal transactions that fall within specified thresholds would incur no fees. This includes remittances, lending for personal purposes, and transfers not exceeding 10 times per week. The BSP also advocates for zero-fee digital payments to small businesses with monthly gross receipts below PHP 250,000.
The move is expected to significantly benefit consumers and small businesses by reducing transaction costs and encouraging a wider adoption of digital payment methods which aligns with the BSP’s broader goal of increasing digital transactions in the country.
Recent data from the BSP show significant surge in digital payments, with their share of total retail payment transactions reaching 52.8% in 2023, up from 42.1% in 2022. This growth, accelerated by the pandemic, has exceeded the central bank’s expectations.
While the proposal has garnered support from some industry leaders, including Jose Teodoro Limcaoco, the president of the Bank of the Philippine Islands and head of the Bankers Association of the Philippines, the BSP is currently seeking stakeholder feedback on the draft circular.
As the country moves towards a more digitalized economy, this policy could play a crucial role in fostering financial inclusion and economic growth.
Emman has been writing technical and feature articles since 2010. Prior to this, he became one of the instructors at Asia Pacific College in 2008, and eventually landed a job as Business Analyst and Technical Writer at Integrated Open Source Solutions for almost 3 years.
