CBDC ‘not worthwhile’ in the Philippines, Finance Sec. Diokno says

The Philippines should focus on perfecting digital payment systems first before considering a central bank digital currency (CBDC), according to results of a study conducted by the Bangko Sentral ng Pilipinas (BSP).

According to Finance Secretary and former central bank governor Benjamin Diokno, the country should boost its digital payments systems InstaPay and PESONet before moving into a CBDC.

“‘Yun po ang resulta ng study na hindi pa (The results of the study show that not) at this time. It will not be worthwhile… This is not the right time to go into the CBDC,” Diokno said during a Senate budget hearing on Monday.

He also noted that a number of digital currencies without the backing of central banks have collapsed, given its volatile and speculative nature.

The Bangko Sentral ng Pilipinas (BSP), led by Diokno until he stepped in as Finance secretary in June, in April looked into the use of digital currencies for large transactions on a 24/7 basis.

“Kung aabot tayo sa punto ng CBDC, hindi na tayo mag-iimprenta ng pera, ‘yun ho ang ibig sabihin nun, so that’s still on the background. Meron po tayong tinatawag na PESONet and InstaPay, we will perfect that first,” Diokno said.

(If we move to a CBDC, we will no longer print banknotes, that’s what that means, so that’s still on the background. We have what we call PESONet and InstaPay, we will perfect that first.)

The central bank launched InstaPay in April 2018, an electronic fund transfer (EFT) payment system that enables individuals to wire funds across banks in real-time.

Meanwhile, PESONet was launched in 2017, enabling the government, businesses, and individuals to initiate EFTs and recurring payments in financial institutions supervised by the BSP within the same banking day.

“It’s working very well, so ngayon hindi ninyo na kailangan mag-issue ng tseke 'di ba (you do not need to issue checks), and then you can transact business without going to the bank. You can pay your bills, you can transfer payments, etc.,” Diokno said.

He also noted that the country has six digital banks to cater to Filipinos, including GoTyme Bank Corp., Maya Bank Inc., the Overseas Filipino Bank Inc., Tonik Digital Bank Inc., UnionDigital Bank Inc., and UNObank Inc.—AOL, GMA News