BPI’s Limcaoco backs BSP digital currency

MANILA, Philippines — The new head of Ayala-led Bank of the Philippine Islands (BPI) is pushing for the issuance of a central bank digital currency (CBDC) in the country.

In a  virtual roundtable discussion, Jose Teodoro “TG” Limcaoco, president and chief executive officer of BPI, told The STAR that  he is not a believer of cryptocurrencies such as Bitcoin and Ethereum which have no legal backing or economic reason for their value.

“I don’t think crypto (Bitcoins) is an asset class I personally would invest in, because I do not see any underlying value,” Limcaoco said.

Just like other central banks in the world, he said the Bangko Sentral ng Pilipinas (BSP) is looking at the possibility of issuing its own CBDC.

“That one I’m very interested in. That to me will be a very interesting concept. If done correctly, it will go a long way in promoting financial inclusion,” he said.

Limcaoco said CBDCs would help raise additional revenues for the government and huge savings for the BSP.

“It will go a long way in getting rid of underground economies because all transactions will be able to be monitored and tracked. It will save the government a lot of money in terms of printing bills and coins. So it’s a very valid proposition,” he said.

Like many central banks in the world, BSP Governor Benjamin Diokno said during the 2021 BSP Youth Summit that the BSP is also closely monitoring developments that involve the issuance and use of privately issued CBDCs.

Diokno said results of the recent BSP study on CBDCs indicate that at this point, the central bank needs to continue its research and strengthen capacity building of its own staff  and establish networks and partnerships with other central banks and institutions that are undertaking similar steps.

“These activities are essential in fostering greater understanding of the operational issues, challenges and the technology behind CBDCs,” he said.

According to Diokno, the BSP is unlikely to issue its own CBDCs within his term that ends in the middle of 2023.  “That said, the BSP is not keen in issuing its own CBDC anytime soon,” he said.

The BSP chief reiterated that any future policy decision to issue its own CBDC would be aligned with its policy as the overseer of the National Retail Payment System (NRPS) as well as emerging developments on CBDCs.

Under its three-year Digital Payments Transformation Roadmap, the BSP has committed to shift 50 percent of total retail transactions to digital channels and increase the number of Filipino adults with bank accounts to 70 percent by 2023 as the country transforms into a cash-lite from a cash-heavy economy.

The Bank for International Settlements (BIS), International Monetary Fund (IMF) and the World Bank made a joint call for global cooperation on CBDCs as around 90 percent of the world’s central banks are looking at creating digital versions of their currencies.