The Financial Services and Taxes & Tariffs Committee held it 2nd committee meeting last February 27, 2018 from 10:00 a.m. to 12 noon at AmCham Hall. Ms. Carmelita Araneta, the General Manager of the Philippine Payments Managements Inc. (PPMI), an industry-led self-governing body which aims to strengthen the cashless payment system in the country, specifically in the national retail payment system was the guest speaker in the said meeting. PPMI is recognized by the Bangko Sentral ng Pilipinas (BSP) as the Payment System Management Body (PSMB) and just incorporated as PPMI last year August, and Memorandum of Agreement (MOA) with BSP being signed on January 12, 2018. The PPMI is run by 15-man board coming from thrift banks, rural banks, and independent directors representing the broader public interest.
Ms. Araneta’s presentation started off by detailing the current retail payments we have: such as 90% are paper based accounts and less than 10% adopts an electronic/digital payments. She then moved on by explaining the timelines of the PPMI in convening the payment industry stakeholders by commencing technical working groups (TWG) for PESONet and InstaPay and collaboration with other concerned government agencies.
She also presented the model of e-payments from countries such as Ethiopia, Ghana, Senegal, Uruguay, Peru, and India and how these countries are saving millions of dollars by adopting digital payments nationwide.
Ghana, as case in point, were able to save $60 million by shifting to digital payments by the end of 2017. Senegal has fully digitized the payments of $50million in social grants benefiting 3 million people. Further, India also save almost $9 billion from 2013-2017 in social protection payments through the country’s Direct Benefit Transfers. Peru also saved money by their mobile wallet that is now offered by 25 financial institutions and has 385, 000 registered accounts.
Despite the success of various countries when it comes to e-payment, the committee meeting, attended by 40 people, are still mostly skeptical on fully adopting the e-payment as there’s still more fundamental factors that need to be addressed first in order to make cashless payment society a success.
Written by: KV Rojas, Industry Development Specialist (FSTT Committee)
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