The Bangko Sentral ng Pilipinas (BSP) has expressed its approval of the decision by several banks to reduce or waive interbank digital transfer fees, a move that is expected to make electronic fund transfers more affordable and accessible for Filipinos. This initiative aligns with the BSP's broader goal of promoting affordable, convenient, and inclusive digital payments across the country.
Support for BSP Circular No. 1238
The reduction in fees follows the issuance of BSP Circular No. 1238 last month, which directs banks to bring interbank transfer fees closer to zero. The circular also requires banks to justify their fees through cost analyses when requested by the central bank. BSP Governor Eli M. Remolona Jr. emphasized the importance of lowering transaction costs to encourage greater adoption of digital payments and strengthen the country's payment system.
"The value of the payment system rises when more people can use it. That's what's called network externalities. For this, interoperability is essential, but the entry fee should also be low. If it can be zero, even better," Remolona said.
Impact on Digital Economy
BSP Deputy Governor Mamerto E. Tangonan noted that lower transfer fees also support the continued growth of the country's digital economy. By reducing the cost of digital transactions, more individuals and businesses are likely to shift from cash to digital payments, further driving economic activity and financial inclusion.
The BSP has committed to continuing its collaboration with banks and other stakeholders to build a digital payments ecosystem that is low-cost, reliable, and widely accessible for consumers, businesses, and the broader economy. The central bank also expressed hope that the banking industry will introduce more initiatives to make digital financial services more affordable, convenient, and accessible for all Filipinos.
Network Externalities and Interoperability
Governor Remolona highlighted the concept of network externalities, where the value of the payment system increases as more people use it. He stressed that interoperability is essential for this, but the entry fee—the cost of using the system—must also be low. The BSP's push for near-zero fees is a key step in achieving this goal.
The BSP's proactive stance on reducing interbank digital transfer fees is expected to accelerate the adoption of digital payments in the Philippines, contributing to a more efficient and inclusive financial system.
