Cash-lite impact on GDP

Shifting to an all-digital payments system or e-payments will undoubtedly benefit the economy.

It will be a safer mode of exchange, it’s less physical handling of cash, and it entails lower transaction costs.

The Bangko Sentral ng Pilipinas (BSP) conducted several studies of different countries transition to a cash-lite economy and it’s evidence-based to say that such a transition creates many beneficial impact. These include increased economic activities through faster and more efficient payment systems, expansion of the market by including the unbanked and the underserved and enhancing risk management with improved transparency and audit trails.

“We envision the country transitioning from a cash-heavy to cash-lite and, eventually, to a coinless and cashless society,” said BSP Governor Benjamin E. Diokno. He’s confident this will happen—a cash lite world for the Philippines—by end2022 at the soonest time possible against the target of 2023. By 2025, the public will no longer use coins, said Diokno.

Going cash-lite and eventually cashless will translate to higher GDP (gross domestic product) output. Pre-pandemic, the country was highly dependent on cash and cheques. Based on a 2015 BTCA report, about 2.5 billion payments worth $74 billion are in digital form translating to one percent and eight percent in volume and value of all retail payments.

The BSP has recently reorganized its currency management sector into a payments and currency management sector (PCMS) for an efficient payments and cash ecosystem. The PCMS, which aims to ensure the safety, efficiency, and reliability of payments system here, will accelerate economic expansion.