Despite some progress, the central bank’s journey to completing the initial goals of digital transformation still has a long way to go amid a challenging landscape, according to Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr.

“How are we doing? … Yes, we are gaining ground, but there is still so much more that we can do,” he said during Tuesday, Oct. 24’s Second Digital Financial Inclusion Awards (DFIA) event at the BSP compound in Manila.

Based on the BSP’s Digital Payments Transformation Roadmap and its National Strategy for Financial Inclusion, by end-2023, about 50 percent of all payment transactions should be in digital form while 70 percent of adult Filipinos should have formal accounts.

“Well, the share of digital payment transactions reached 42 percent in 2022; account ownership was 56 percent in 2021; and 65 percent of households have accounts in 2022,” said Remolona.

The BSP chief did not reiterate his previous pronouncements that he is confident that they will achieve their goals this year, but he did commend the “transformative power of digital technologies” that micro, small and medium enterprises (MSMEs) have embraced to “grow their operations and serve their clients.”

“The digital solutions they adopted range from e-commerce, social media marketing, and use of e-wallets,” he noted.

The BSP has been promoting the DFIA especially for both microfinance institutions and microentrepreneurs “who successfully adopted digitalization to boost efficiencies and scale up customer services.”  

“In this roadmap, our goal is to convert 50 percent of the total volume of retail payments into digital form and to onboard 70 percent of Filipino adults to the formal financial system,” said Remolona, adding that “microenterprises and microfinance improve the lives of so many Filipinos, more so when they are digitalized.”

Last August, the BSP chief said their digitalization efforts “are on track” because “the payments that we use, in shops and in stores, are increasingly digital.”

As of end-2022, about 42.1 percent of payment transactions have shifted to e-payments. This was higher compared to 30.3 percent in 2021.

When the BSP started this, only one percent of transactions was in digital form in 2013. By 2018, the volume increased to 10 percent and then to 14 percent in 2019.

By the time the pandemic hit the globe, digital payments expanded to 20.1 percent of all transactions in 2020.

The BSP itself has assisted in the fast migration of non-digital to digital because the central bank has become highly digitalized since the start of the the pandemic. They began pre-pandemic but rapidly progressed during the Covid crisis years.

The share of digital transactions in total payments has been growing steadily with both InstaPay and PESONet. Also, more people are using the QR Ph code for payments while all payment service providers still using non-QR PH codes were required to shift by end-August this year.