The Bangko Sentral ng Pilipinas (BSP) has set a minimum capital requirement of ₱1 billion (about $16 million) for thrift, rural and cooperative banks that shift to business models similar to digital banks, as the central bank moves to strengthen safeguards around digital transformation in the banking sector.
Under Circular No. 1240 dated Sept. 21, 2026, existing thrift banks, rural banks and cooperative banks that the BSP determines are operating under a business model similar to that of a digital bank must meet the ₱1 billion minimum capital requirement applicable to digital banks, along with other prudential requirements.
The banks will have six months from receipt of a notice from the BSP to comply with the requirements.
The rules will also apply when a proposed acquisition is intended to transform a thrift, rural or cooperative bank into a technology-driven business model.
In such cases, the BSP will require the ₱1 billion minimum capital at the time of application, while the bank will also have to comply with prudential standards applicable to digital banks.
The BSP said the requirements are intended to ensure that banks can manage risks arising from the nature, scale, complexity, and risk profile of their operations.
The rules cover banks that either operate under a business model similar to a digital bank, or whose capital and risk management systems are no longer considered commensurate with their stated business model and risk profile.
They also cover banks that use digital platforms to deliver services while recording significant growth in loan or deposit balances.
The BSP may impose additional safeguards depending on the circumstances, including enhanced supervisory reporting, restrictions on certain activities or new digital products and services, and stronger risk management and control systems.
The circular also provides for the issuance of additional digital bank licenses, including through the conversion of existing thrift, rural and cooperative banks, subject to the BSP’s licensing framework for digital banks.
A digital banking license would allow converted banks to offer their digital services to a broader customer base, including customers outside their traditional geographic area of operation.
The BSP will review applications for conversion and consider factors including the bank’s readiness to operate as a digital bank, the strength of its governance and systems, its value proposition and business model, and its available resources.
The Philippines currently has seven licensed digital banks, according to the BSP.
The new requirements come as smaller banks increasingly use digital platforms to expand their services and grow their loan and deposit businesses.
The BSP said the framework is intended to support responsible innovation and digital transformation while maintaining the safety and soundness of the banking system.
