Source: https://mb.com.ph/2022/07/20/bsp-pushes-for-more-it-infra-investments/
The Bangko Sentral ng Pilipinas (BSP) is calling for higher public investment to upgrade and modernize the country’s information technology (IT) infrastructure as the country pursues more digital payment streams and improve access to digital banking.
“In an island economy with nearly everyone having a cellphone, public investment in satellite communications may enable access to financial services almost universal,” according to BSP Governor Felipe M. Medalla during an ASEAN-5 central banks’ virtual discussion on cross-border payments.
E-payment transactions
Medalla said the government could work with the private sector to “maximize the potential of and speed up access to e-money and phone-based banking services.”
He emphasized that increasing public investment on IT infrastructures and involving private players will fasttrack the implementation of a multilateral cross-border payments connectivity.
Central bank governors shared their visions for the future of cross-border payments in the ASEAN region during the session on “Faster, Cheaper, More Transparent and More Inclusive Cross-Border Payment to Promote Regional Economic Recovery”, part of the Indonesia Digital Economy and Finance Festival 2022.
Also discussed were key aspects of establishing interoperability, opportunities for ASEAN, and prospects for collaboration among authorities and market players.
The BSP, for its part, is currently in talks with the Monetary Authority of Singapore and Bank Negara Malaysia for bilateral linkages between Philippines’ InstaPay with Singapore’s PayNow, and Malaysia’s DuitNow.
Medalla said that in the interoperability of cross-border payments, central banks should address not only the technical issue of aligning the features of different payment systems, but also the non-technical challenges such as those relating to regulatory, supervisory and oversight frameworks, as well as anti-money laundering and data privacy related policies.
Internet connectivity is recognized as a critical enabler of financial and economic inclusion as financial transactions and services shift to online platforms.
The BSP has supported Executive Order No. 127 which was issued in March 2021 to expand internet connectivity via satellite services which will improve internet connectivity in community areas particularly in remote areas.
The EO’s implementing rules and regulations (IRR) was also issued in September last year by the Department of Information and Communications to guide banks, fintech companies and other financial sector entities in the use of satellite technology for their operations.
The BSP has proposed that as part of the EO’s IRR, banks or a consortium of banks in partnership with local financial service providers should be allowed to set up their own satellite broadband for digital or branchless operations.
The EO permits non-enfranchised but registered Internet Service Providers ISPs and value-added service providers to directly access satellite systems to build broadband facilities. There are 14 satellites that cover the Philippines.