The first month of the year is always and always will be significant to the banking industry. Every January each year, the Bangko Sentral ng Pilipinas (BSP) governor hosts the annual reception for the banking community, with the who’s who in the business circles in attendance. It’s one of those events when the monetary authorities acknowledge the support the industry stakeholders. Banking journalists in suits or barong and ladies in their black dress likewise look forward to the social gathering because it’s an open-opportunity to mingle with the captains of business and industry. It’s a den of news sources. the evening is highlighted by the report of the BSP governor on how the financial system performed and capped, at times, with the unveiling of plans and programs for the year.
It’s a bit similar to the vin d’ honneur, the traditional New Year reception at Malacañang hosted by the President wherein Cabinet members, other high state officials, members of both Houses of Congress, the business community, the Judiciary and the diplomatic corps go on networking.
January also marks the birth of central banking in the country. Based on the timeline posted in the BSP website, central banking started in 1900 through Act No. 52 passed by the First Philippines Commission, placing all banks under the Bureau of Treasury with the Insular Treasurer having supervisory and examination powers over banks and banking activities. However, it was only on January 3, 1949, that the Central Bank of the Philippines was formally inaugurated and opened with Miguel Cuaderno Sr. as the first governor. Thus, officially, central banking marks its 70th year this year.
Central banking has come a long way. In today’s dynamic business landscape, it has stepped up to the challenge, particularly with the evolving backdrop of the vibrant social media. While price and financial stability remain the two important pillars of central banking, the BSP has embraced financial technology (fintech) to provide the ground work for a more efficient payments system.
Fintech and digitalization are game-changers – reshaping the future landscape of the country’s banking system.
BSP Deputy Governor Chuchi Fonacier tells me the BSP has incorporated the advantages of fintech in its regulatory framework as well as in its mission and vision. Even her sector’s title has evolved. Ms. Chuchi’s department, too, has changed. It is no longer called bank supervision and examination; it is now the Financial Supervisory Sector or FSS.
Included in the BSP’s financial reform agenda is the promotion of finance innovation. This takes into consideration that technology-enabled innovation in financial services could result in new business models, applications, processes, or products, which could have material effect on the provisions of financial services. Thus, it would be a balancing act between promotion and ensuring adequately the protection of financial consumers.
In partnership with the private sector and other organizations, the BSP is conducting a campaign program advocating the use of National Retail Payment System that would educate electronic consumers such as the beneficiaries of the overseas Filipino workers to use the electronic payment system as a mode of transacting business such settlement of bills, goods and services. This is the next stage. Using the app in your smartphone, and just by the touch of your fingertip, settlement is done. It’s paperless, environmental-friendly.
Although, it’s convenient, no queuing, I’m still old school when it comes to bills payments. I’m not in the 2 percent of the banking populace that settles its monthly dues electronically. I still do it over the counter.
Ms. Chuchi’s advice: I’ve to step up to the challenge and be included in the vision of BSP to bring to 20 percent the number of electronic payment users by next year.
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