The central bank and financial institutions involved in the creation of the country’s National Retail Payment System (NRPS) are setting up a project management office that will oversee the system, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr., said.
“We’ve been talking to the banks, consulting them . . . There was a meeting recently and more details [on the NRPS]were provided, like the creation of project management office that will oversee the setting up of the system,” Tetangco told editors and reporters of The Manila Times in a roundtable on Tuesday.
“The system itself will have a governing body that is called for now as the Payments System Management body that will oversee the operations of the NRPS,” Tetangco added.
With the NRPS, Filipinos will have easy access to financial services, being able to make payments and receive or transfer funds anytime and anywhere at a reasonable price from any digital device.
“We want to set up an NRPS where there are third party account-to-account payments that can be made through digital devices,” Tetangco said.
The system includes not only the use of automated teller machines (ATMs) but also mobile wallets and the like that could reduce the dominance of transactions done through cash.
The BSP has said that at present, the Philippines averages 2.5 billion payments per month, corresponding to a value of over P3.2 trillion, of which 99 percent is cash-based.
The central bank said it could take three to five years before the NRPS becomes a reality, noting that laying down the critical foundation alone will require about two years.
One base that financial institutions are working on now is the creation of an interoperable ecosystem for various kinds of e-payments. Besides the interoperability of the system, players are also working on the constitution of the NRPS.
The central bank is now drafting the governance framework but would prefer that the system is self-governed by the players and not by the government. This would allow players to introduce innovations that will further promote financial inclusion in the country, it said.
The BSP said the governance framework would define the areas where players should cooperate or compete.
Tetangco said one of the NPRS’ advantages was that it would make payments faster, leading to more economic transactions. Payments will be secure and reliable, he added.
He said NRPS was important to the BSP’s financial inclusion advocacy as latest data showed that access to financial products and services remained a challenge in the Philippines.
According to the National Strategy for Financial Inclusion (NSFI), 36 percent of municipalities still did not have banking offices as of 2014.
“While physical network of banks and ATMs continues to experience sustained growth, there are regional disparities in the distribution of access points,” an NSFI document states.
Bank offices also have the economic tendency to concentrate in highly populous and urbanized regions. Likewise, the concentration of deposits and loans is skewed toward these areas.