• ‘E-payments can generate savings’


    A shift to electronic-based payment systems can generate savings and increase the per capita income of an economy, an official of the central bank said.

    This was the message of Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr. in his keynote speech during the SWIFT Business Forum Philippines held last week in Makati City.

    “Based on the experience of other countries, a shift from a paper-based to an electronic-based payment system can generate annual savings of up to one percent of the gross domestic product,” he said.

    Espenilla also pointed out that countries with high level of electronic payment transactions per capita also have high levels of per capita income.

    Because retail payment systems contribute to the efficiency and stability of the financial system, he said the Philippines’ own National Retail Payment System (NRPS) is positioned to facilitate the country’s transition from a cash-heavy to cash-light economy, while ensuring there is no discrimination in access to the retail payment system for all qualified participants.

    “The Philippines is a cash and check-dependent economy. Filipinos make approximately 2.5 billion payment transactions per month, amounting to about $74 billion, but only 1 percent of the volume is done via electronic means,” Espenilla said.

    NRPS, the BSP official said, will bring material benefits for businesses, consumers and the government in terms of speed and efficiency of transactions, reduced costs, improved transparency, enhanced security, and expanded access to financial services.

    The system can serve as an effective platform upon which innovative digital solutions for financial inclusion can be delivered, he added.

    Espenilla said among the priority projects under the NRPS is the establishment of Electronic Credit Transfer Scheme, where businesses and individuals can open one account with any financial institution and enable them to transfer funds or make payments to any other accounts maintained in other financial institutions.

    Other features under the scheme include a “Sender Only Pays” policy the BSP intends to promote, which will allow consumers to receive funds and payments in full, with no deductions; immediate credit to the accounts of recipients upon settlement to ensure availability of funds; multiple clearing and settlement of payment transactions via PhilPaSS (RTGS) on a daily basis; electronic issuance of other payment-related documentation such as official receipts and withholding tax certificates, the details of which are currently being arranged with the Bureau of Internal Revenue; the reduction of transaction-related costs to less than that of current systems; and the close monitoring and management of settlement risk.

    “As consumers gain more purchasing power and experience, opportunities for more financial options could become available. Financial institutions can cross-sell their products like deposits and loans, investments and insurance,” Espenilla said.

    In closing his remarks, Espenilla stressed the NRPS can contribute to the stability and efficiency of the financial system, help to achieve higher economic growth, and enhance the overall competitiveness of the economy.


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