MANILA, Philippines — The share of digital payments to total retail transactions jumped to 52.8 percent in 2023 from 42.1 percent in 2022, slightly exceeding the Bangko Sentral ng Pilipinas (BSP)’s goal of 50 percent, as more Filipinos use online fund transfers.
The BSP is now targeting to increase the share to 60 to 70 percent in the next four years, in line with the government’s Philippine Development Plan for 2023 to 2028.
BSP Governor Eli Remolona Jr. said surpassing the target of converting at least half of total retail payments volume in digital form by 2023 was due to the collaboration of the BSP with the public and private sectors.
“With this progress, we believe that we are better positioned to further drive digital payments usage across different segments of our society. Together, we will continue to drive the momentum and empower Filipinos in building a more inclusive and cash-lite society,” he said.
Based on its 2023 Report on the Status of Digital Payments in the Philippines, the central bank said that more than 2.6 billion transactions out of five billion monthly transactions were successfully converted into digital form, 28.1-percent higher than the previous year.
In terms of value, the monthly value of digital transactions reached P6.1 trillion or 55.3 percent of the total value of digital payments, a surge from 40.1 percent in 2022.
The surge in digital payments were mainly driven by the widespread adoption of online merchant transactions, person-to-person (P2P) remittances as well as supplier payments made by businesses, the BSP said.
Data showed the volume of merchant payments went up by 12.8 percent to 1.7 billion in 2023 from 1.5 billion in 2022, representing nearly 65 percent of the total volume share of digital payments.
The increase in merchant payments was driven by higher QRPh person-to-merchant (P2M) transactions of 58.6 million in 2023, more than 28 times the 2.1 million in 2022.
“This significant growth particularly for small-value retail transactions suggests that more and more Filipinos are embracing digital payments for everyday transactions,” the BSP said.
Non-bank e-money participants held 95.1 percent of the total volume of QRPh P2M transactions for 2023. This shows that Filipinos seem to prefer the usage of e-wallets in making QRPh-enabled payment services.
Meanwhile, the volume of P2P payments grew by 68.6 percent to 505.3 million in 2023 from 299.7 million in 2022, accounting for 19.3 percent of the total volume share.
The higher transactions of P2P remittances was driven by the increased usage of e-money accounts, as Filipino consumers with e-wallet accounts expanded by 52.8 percent to 393.6 million accounts in 2023.
The volume of supplier payments also stood at 160 million last year, more than double the 49.9 million in 2022, thanks to the continued rise in PESONet transactions.
In a press briefing, BSP Deputy Governor Mamerto Tangonan said converting an additional 20 percent of total retail payments volume in digital form would be more challenging.
“We have to convert the non-users into users by addressing the chief constraints that keep them from using digital payments,” he said. “Number one is costs. We have to reduce the cost of making digital payments. We have to work with the industry to achieve that.”