The Philippines central bank and the Malacañang—the official residence and the primary workplace of the country’s president—urge financial institutions to reduce or completely eliminate digital financial transfer fees.
Philippines central bank: Lower transfer fees or face penalties
The Bangko Sentral ng Pilipinas (BSP) ordered financial institutions last week to comply with its set fair pricing rules for digital fund transfers. Those who have yet to comply were ordered to explain and have been warned of possible penalties. BSP Deputy Governor Mamerto Tangonan said on July 7 that they had invited “several” financial institutions that have yet to cut their transfer fees and those whose charges remain above the levels to a meeting last week to discuss their compliance with the reduced digital transfer fees regulations.
“Just so we’re on the same page. We’ll give them a chance to explain what steps they have taken and why,” Tangonan said. “It would not be appropriate to impose penalties at this moment. If they remain noncompliant even after these meetings, then we may impose sanctions.”
Under the BSP Circular No. 1238, which took effect on July 4, banks and other BSP-supervised financial institutions must keep fees for person-to-person transfers between banks or e-wallets close to the fees charged for transfers within the same institution. Since transfers within the same digital bank or wallet are usually free, the BSP said any fee for interbank or interwallet transfers should primarily reflect the cost charged by the network switch operator.
The central bank noted that while institutions could adopt different pricing based on legitimate business or operational considerations, they must still ensure that their fees don’t unfairly subsidize users.
At the time of writing, several traditional and digital banks and digital wallets have already lowered their fees since the BSP’s announcement.
Popular digital wallet GCash and digital financial app Maya have reduced their InstaPay fee from PHP15 ($0.24) to PHP10 ($0.16). At the same time, the government-run Land Bank of the Philippines and the Bank of the Philippine Islands (BSP) were among the first banks to fully waive their retail transfer fees on May 31 and July 1. This was followed by UnionBank of the Philippines (UB) on July 7, while Rizal Commercial Banking Corp. (RCBC) reduced its InstaPay charges for the first 30 transfers each month, with a minimum transaction amount of PHP100 ($1.62). The Philippine National Bank (PNB) and Banco De Oro (BDO) joined the fee waiver on July 10 and July 9, respectively.
Palace urges banks, digital wallets to cut transfer fees
Meanwhile, the Malacañang urged banks and other financial institutions to reduce or eliminate transfer fees, in line with the current administration’s target to improve financial access for Filipinos and make banking more inclusive. Palace Press Officer Claire Castro has commended Finance Secretary Frederick Go, who currently chairs the Landbank board of directors, for initiating the move to slash transfer fees and remove convenience charges for certain government transactions.
“Digital payment should be fast, secure, convenient, and affordable. We’ve been talking to [the Bangko Sentral ng Pilipinas] about this. We want to level the playing field,” Go said.
Following the discussion, the state-run bank has trimmed its InstaPay transfer fees for person-to-person transfers from PHP15 ($0.24) to PHP8 ($0.13) and introduced one free InstaPay transfer daily for transfers of PHP1,000 ($16.23) or less.
Later on, Landbank implemented zero-fee charges for person-to-government transactions via QRPH-enabled channels such as Link.The BizPortal platform, as well as physical QR standees at participating agencies and government websites that use the BizPortal app. The covered transactions include payments for government-owned or controlled corporations, select national government agencies, LGUs, water districts, and state-run universities and colleges.
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