By Lawrence Agcaoili, The Philippine Star –

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) reported that there are eight million users of mobile banking in the Philippines boosting the central bank’s efforts to provide financial services in rural and hard to reach areas at a lower cost and higher efficiency.

BSP Deputy Governor Nestor Espenilla Jr. said the Philippines has been recognized by international organizations for its microfinance initiatives and is considered as the leading pioneer in mobile banking solutions for the poor.

Espenilla pointed out that there are eight million users of electronic money (e-money) such as Smart Money of PLDT-controlled Smart Communications and G-cash of Ayala-controlled Globe Telecom in the Philippines.

He said the number of banks offering mobile banking for microfinance operations has reached 49 rural banks from none before 2005.

According to him, some banks even lowered their interest rates on microfinance loans for clients who use text-a-payment platform by 50 basis points on monthly rates.

“Technology extends outreach of microfinance and banking services to a large number of bankable but un-banked especially those in rural and hard to reach areas at lower costs and higher efficiency,” Espenilla said.

He explained that the mobile phone industry in the Philippines serves all income groups especially low income groups and more than 75 percent of the population have mobile phones.

More consumers, particularly families of overseas Filipino workers (OFWs), are starting to appreciate the use of electronic transactions. e-transactions involve the payment of goods purchased and services rendered but could also be a conduit for the money sent home by Filipinos working abroad.

“The amount of e-money transactions is already huge, and we expect it to grow further,” the BSP official added.

The BSP has already issued a regulation covering e-money wherein entities already providing or wanting to provide an e-money service must register with the central bank as an electronic money issuer (EMI).

EMIs include banks, non-bank financial institutions and money transfer agents. Those qualified as EMI include stock corporations with a minimum paid-up capital of P100 million.

e-money is also not considered a bank deposit and is not covered by the deposit insurance provided by the Philippine Deposit Insurance Corp. (PDIC).

The guidelines also limit the maximum amount that can be loaded to any e-money instrument at P100,000 a month.