Electronic fund transfers reach P1.8 trillion in 2 months

MANILA, Philippines — The Philippines continues to catch up with digitalization in Southeast Asia as electronic fund transfers in the country rose by 34.5 percent in the first two months of the year, according to the Bangko Sentral ng Pilipinas.

During a high level seminar at the ASEAN Indonesia 2023, BSP Governor Felipe Medalla said the central bank would continue to work with its counterparts in the region to achieve its financial inclusion and digitalization goals.

Latest data from the central bank showed the value of electronic fund transfers coursed through the PESONet and InstaPay platforms reached P1.83 trillion in the first two months of 2023, from P1.36 trillion in the same period last year, as more Filipinos  embrace digitalization.

The value of PESONet transactions surged by 32.6 percent to P1.15 trillion in the first two months while the amount of InstaPay transactions jumped by 37.8 percent to P681.2 billion.

In terms of combined transaction volume, PESONet and InstaPay booked a 25.8 percent increase to 58.922 million.

The volume of PESONet transactions grew by 14 percent to 14.57 million while InstaPay transactions jumped by 28.4 percent to 101.79 million amid the wider use of internet banking and e-money transactions for domestic remittances, e-commerce, bills payment, and other immediate low-value payments.

PESONet and InstaPay are automated clearing houses under the BSP’s National Retail Payment System (NRPS) that was launched in December 2015 to promote a safe, efficient, affordable, inclusive and reliable retail payment system.

PESONet enables high-value transactions and may be considered as an electronic alternative to the paper-based check system, while InstaPay is a real-time, low-value electronic fund transfer facility for transactions up to P50,000 and is most useful for remittances and e-commerce.

Medalla said PesoNet transactions are now overtaking check transactions as more Filipinos embrace digitalization.

Last year, the combined value of PESONet and InstaPay transactions jumped by 36 percent to P9.94 trillion from P7.24 trillion in 2021 as volume increased by 21 percent to 633.46 million from 523.59 million.

According to Medalla, the Philippines has also launched other digital payment streams such as the use of quick response code through the National QR Ph as well as the Palend-QR Ph Plus.

Under its Digital Payment Transformation Roadmap, the central bank aims to shift 50 percent of total retail transactions to electronic channels and onboard at least 70 percent of Filipino adults to the financial system through the ownership and use of a transaction account by 2023.

With the COVID-19 pandemic serving as catalyst, the share of digital payments to total retail transactions increased to 30.3 percent in 2021 from 20.1 percent in 2020. Prior to the launch of the NRPS, the share of electronic payments to total retail transactions stood at only one percent in 2013.

Likewise, the number of banked Filipino adults almost doubled to 56 percent in 2021 from 29 percent in 2019.

“Financial inclusion is rising. If we had waited for banks to onboard them, it would have taken at least five more years,” Medalla said.

He cited poor internet infrastructure as one of the major concerns affecting the pace of the country’s digitalization journey.

The BSP chief hopes to put in place cross-border real-time payments with its counterparts in the region in the next two to three years after the Bank for International Settlements (BIS) successfully linked several instant payments systems around the world.