In efforts to go cash-lite and transition to more digital payments in the country, the Bangko Sentral ng Pilipinas (BSP) is also looking to lessen coin dependence for payments.
BSP Deputy Governor Mamerto Tangonan, head of the Payments and Currency Management Sector (PCMS), told the Philippine Daily Inquirer that the central bank aims to create a “cash-lite” society “where digital payments coexist harmoniously with cash, providing Filipinos with the freedom to choose how they transact.”
In order to transition to a cash-lite and coin-lite society, the BSP said it needs to review the impact of interventions on the currency demand of Filipinos, particularly of policies promoting cashless transactions.
The BSP has reportedly been encouraging banks to eliminate online transaction fees since 2023. “Between persons, between individuals, we’re thinking about making [transaction fees] zero,” said BSP Governor Eli M. Remolona, Jr. in a Rotary Club meeting on January 9.
The bank also proposed that payment operators shift to a subscription business model to further reduce costs for person-to-person and buyer-to-small business electronic transfers. “This approach acknowledges that even as we encourage the broader adoption of digital payments, the Philippines must continue to meet the economy’s currency needs,” Tangonan said.
“Ultimately, it’s not about choosing one over the other but about providing options,” he added. “By ensuring that Filipinos have the freedom to pay with cash or embrace the convenience of digital payments, we promote financial inclusivity and resilience in our economy.”
Card payment organization Visa conducted a poll from October to November 2023 and found that cash use declined from 96 percent to 87 percent in the country. Country manager Jeff Navarro said that as more merchants accept cards, dip, contactless, and mobile wallet payments, more Filipinos grow comfortable with contactless payments.
The BSP also reported hitting its target of digitalizing 50 percent of retail transactions in the country in 2023. According to the bank, the share of digital payment transactions in retail payments increased from 42.1 percent in 2022 to 52.8 percent in 2023.
By 2028, the BSP aims to bring the portion of online payments up to 70 percent of the country’s total retail transactions.
