BSP mulls increasing slots for digital banking licenses

MANILA, Philippines — The Monetary Board may consider increasing the number of slots for new digital banking licenses depending on market demand and the value propositions of applicants, an official from the Bangko Sentral ng Pilipinas said.

BSP Deputy Governor Chuchi Fonacier said while the central bank plans to stick to its plans to open applications for four new digital banking licenses on Jan. 1, 2025, the Monetary Board is open to increasing the slots.

“It will be up to the Monetary Board… Does (an applicant) have a good value proposition? (If so,) we may go beyond the four (slots),” Fonacier told reporters late Monday.

The BSP will lift the moratorium imposed on the granting of digital banking licenses starting Jan. 1, 2025, but will only permit a maximum of 10 digital banks to operate in the country.

Six digital banks are currently operating in the Philippines since the issuance of the Digital Banking Framework in December 2020. Thus, lifting the moratorium will only accommodate four additional licenses, coming from either new or converting banks.

The BSP previously granted digital banking licenses to Maya Bank, Overseas Filipino Bank Inc., Tonik Digital Bank Inc., UNObank Inc., UnionDigital Bank and GoTyme Bank.

According to Fonacier, the BSP will release a circular this month as there had been several interested players from both local and foreign entities.

“There’s one (foreign applicant) who has a good track record – European, and it’s really a digital bank. You’ll soon find out,” she said.

However, the BSP will be adopting a stringent evaluation process to ensure new licenses bring innovative and sustainable models to the market.

“There’s a chance we won’t approve all four slots,” Fonacier said, adding that applications with redundant business models or insufficient differentiation from existing players may not qualify. But firms with strong track records, particularly those operating successfully in other jurisdictions, could gain favor.

The BSP has also indicated that traditional banks operating similarly to digital banks will be encouraged to apply for formal digital bank licenses, further influencing the final count of licenses issued.

Qualified applicants may receive approval within 2025 if they meet the BSP’s rigorous standards.