Is The Philippines Ready For Virtual Money?

A number of central banks are getting ready to issue their own digital currency. Some are on the investigative and analysis stage, others like the Philippines are saying we’re interested, but our cash-heavy financial system isn’t quite ready for the world of virtual money yet.

- Lee C. Chipongian

At least not in the next three years.

For Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno, a central bank digital currency (CBDC) is a complicated issue. While he has said that this is not going to happen during his time (his six-year term ends in July 2023), the BSP is setting up the stage for a possible CBDC future and it will build some level of preparedness for this.

“The readiness of Filipinos in using digital platforms and technologies is a crucial factor,” the BSP said in an email.

Issuance of CBDCs will depend on a lot of things such as how far developed our financial market is, as well as the demand for CBDCs.

“It would be a significant achievement if the BSP could build this capacity within the next three years. Even with the technological know-how, a CBDC issuance would depend on whether there is a need for it, and the net benefit of the CBDC to the consumers, the financial market, and the Philippine economy results to higher efficiency gain compared to the existing electronic payments system,” the BSP said.

Other factors should also be at play before a CBDC is out there such as cash usage and the public acceptance and use of privately issued digital currencies.