BSP says banks want two years to adapt to removal of transfer fees

BAGUIO CITY — A number of banks have asked the Bangko Sentral ng Pilipinas (BSP) to provide a two-year period as a soft landing for them to adapt to the proposed removal of interbank transfer fees, according to a top official.

BSP deputy governor Mamerto Tangonan said that during their discussions, banks have given mixed feedback about removing the transfer fees, with InstaPay fees ranging from P8 to P75 per transaction, and from P8 to P600 for PESONet consumers.

“May mga sumuporta, pero may mga [There are those who support, but others have] expressed that it will affect their business. And also another large number said that ‘Yes, we know that it’s gonna come, but provide us a soft landing… Two years daw so they could adapt,” he said in an interview.

Tangonan said the Monetary Board will still have to decide whether the two-year period will be acceptable.

This comes as the BSP last year released a draft circular that would remove the cost of person-to-person electronic money transfers, and the cost of payments to micro, small, and medium enterprises (MSMEs). It gave BSP-supervised financial institutions (BSFIs) until October 11 for feedback.

The draft circular provides that the transfers would be free of charge for personal transactions if within the threshold that would be set by the BSP such as being either as a remittances or for lending not conducted in the course of business, and these do not regularly exceed 10 times a week.

Transaction fees will then be collected for transactions beyond the thresholds set

“There’s a segment that says that either ‘Our business model is not so conducive of that’, or they said that ‘Okay, we soo it coming, but we’re not ready yet. Give us a bit more time’,” Tangonan said.

“We’re trying to see a balance where as much as possible, we can bring most of the industry participants towards that, so that’s what we are discussing with them. That’s what we are figuring out,” he added.

The BSP last September said it was working with banks to remove interbank transaction fees, with governor Eli Remolona Jr. saying the reserve requirement ratio (RRR), or the amount of cash a bank must hold in its reserves against deposits made, could be reduced to 0% during his term.

With a 0% reserve requirement ratio, banks could utilize the reserves instead of parking them with the central bank without any interest earned, which could then offset the costs incurred by banks for interbank transfers.

Currently set at 7%, said to be among the highest around the world, Remolona hinted at reducing this to as low as 5% this year.

Moving forward, Tangonan said the should the central bank come up with a policy for the removal of interbank transfer fees this year, it would possibly have a transitory provision for banks to be able to gradually pivot.

“It’s hard to give a deadline, pero [but] we seem to be, we see convergence where it’s acceptable to most industry participants, so mahirap lang magbigay ng [it is difficult to give a] timeline,” he said.

“Maybe if ever within the year, it’s a policy [that] maybe we’ll provide maybe for a reasonable transitory provision,” he added. — BM, GMA Integrated News