Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, is reportedly open to exploring potential investment deals from Qatar. According to a BSP representative, these deals will focus on digital banking and Fintech projects.
Arifa A Ala, the MD at BSP, noted that the nation’s reserve bank has been open to several different ideas and supporting regulations that would introduce new types of digital transactions in the country’s banking sector and also help non-bank financial institutions with adopting the latest digital technology.
Ala noted that as part of the nation’s strategic planning, it will aim to conduct at least 30% of all transactions via online or digital platforms. The BSP managing director had commented on how the Philippines would adopt digital transactions during the recent third edition of the Philippine Economic Zone Authority’s (Peza) online Business Continuity Forums..
Ala acknowledged that the future of banking will be mostly digital. She revealed that the BSP has dedicated an entire subsector to Fintech related activities and projects. She also confirmed that the country “strongly” supports digital banking.
Ala pointed out that the Philippines has made substantial progress with adopting Islamic banking. She emphasized that it’s important to offer all-digital, Shariah-compliant Fintech solutions to the market, as there’s a lot of demand for these services.
The Philippines, which has a GDP of over $330 billion and a population of around 110 million, was ranked fourth ($35.1 billion) in the World Bank’s top five remittance recipient nations. It’s a little behind Mexico which received $38.7 billion in remittance payments. China ($70.3bn) is ranked second, and India is ranked first ($82.2bn), as of October 2019.
Greg Loayon, the Chairman of the Philippine Business Council-Qatar (PBC-Q), said that there’s currently a large gap when it comes to having access to modern banking services. He believes it would be a “good move to capitalize on the Philippines” as it has a very high mobile penetration rate. The nation is ready to begin using more Shariah-compliant financial servics, Loayon suggested.
“I think it would be a first for the Philippines, so I am interested to see where the Bangko Sentral ng Pilipinas is with regards to digital platforms because there are investor conversations happening right now in Qatar on digital banking in the Philippines.”
Loayon also inquired about a potential partnership between the Philippine Economic Zone Authority (Peza) and BSP on launching various Fintech projects – which may be established inside the Peza economic zones and would still be regulated by the BSP.
The Philippine Economic Zone Authority is a government agency attached to the nation’s Department of Trade and Industry. It has been established to help promote investments in the country.
Ala said she’s open to suggestions from Charito B Plaza, the director at Peza, which may involve signing a memorandum of understanding (MoU) with the BSP for launching Islamic financial institutions within the Peza economic zones.
“With the recent amendment of the BSP’s charter, the supervised financial institutions of the BSP have expanded to include money service businesses and credit granting entities, among others, so they are under our supervision.”
Fintech has emerged as a “game changer” during COVID-19 for consumers in the Philippines, and traditional businesses must catch up, an industry executive recently noted.
Meanwhile, Qatar has been ranked high on “ease of doing business,” as it develops Fintech friendly policies. It has also launched a regulatory sandbox.
Cooperation between Qatar and other countries like Hong Kong in areas like digital commerce and Fintech will strengthen bilateral relations, according to the CEO at Doha Bank.