MACTAN ISLAND, Cebu: The central bank is drafting the governance framework for a national retail payment system (NRPS) but would prefer that the system is self-governed by the players and not by the government, a key official said on the sidelines of the Asia Pacific Economic Cooperation (APEC) Finance Ministers’ Meeting and Related Meetings here.
Such a scheme would allow players to introduce innovations meant to further promote financial inclusion in the country, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr. said in a press conference on Thursday.
“The drafting of the possible governance rules is very important in the payment system because it basically determines the rights and privileges of all the players so that they can interact with one another,” Espenilla said.
Espenilla said the governance framework will define clearly the areas where the players should cooperate as well as the areas where they can compete “because they are cooperators as well as competitors.”
“That’s the tricky part of it. That is why we need to hammer out a good governance framework that will enable this thing to happen,” he said.
“It is potentially inefficient if the government or the regulator calls the shots because that can be an impediment to innovation. One of the objectives here is to accommodate innovation and there are so many innovations happening right now,” he said.
Under the NRPS, an initiative of the central bank, Filipinos will have easy access to financial services such as to make payments and receive or transfer funds to other accounts anytime anywhere at a reasonable price from any digital device.
The system includes not only the use of automated teller machine cards, but also checks, mobile wallets and the like that could reduce the dominance of payment transactions done through cash.
At present, the BSP said the Philippines averages 2.5 billion payments per month, which correspond to a value of over P3.2 trillion, and 99 percent of these payments are cash-based.