BSP Likely to Lift the Limit of Operating Digital Banks in the Philippines
The Bangko Sentral Ng Pilipinas (BSP) is likely to lift the limit on the number of allowed digital banks in the Philippines.
Currently, only five digital banks are allowed to operate in the Philippines, as stated under BSP Circular No. 1105.
BSP defines digital banks as banks that offer end-to-end financial products and services processed through a digital platform and electronic channels with no physical branches providing financial products and services.
Under BSP Circular No. 1105, the required minimum capitalization of a digital bank is ₱1 billion.
BSP Governor Benjamin Diokno informed participants of the 2021 BSP Youth Summit that the Monetary Board could modify or lift the limit of allowed digital banks in the Philippines as new evidence becomes available.
Diokno stated, “The limit on digital banking licenses allows BSP to assess the financial performance of digital banks and their impact on existing banks and the banking system [as well as] their effectiveness in achieving BSP’s financial inclusion goals.”
He added that “[BSP] must find a balance between promoting an enabling environment for financial innovations on the one hand and ensuring safety and soundness of individual financial institutions and the entire system, as well as protection of consumers on the other hand.”
At present, BSP approved three digital banks to operate in the country, namely Overseas Filipino Bank, Tonik Digital Bank, and UNObank.
BSP Deputy Governor Chuchi Fonacier noted that BSP is currently evaluating three applications for a digital banking license, while another company has also expressed interest.
