Financial Innovation in the Philippine
Capital MarketRamon S. Monzon
President & CEOFebruary 2023 | Asian Capital Markets Roundtable1

Growing Popularity of Fintech in the Philippines
Types of Accounts Owned (% of Adults)

Leading Fintech Sectors* (% of Fintech Companies)

Polulation)

36%

E-wallet/Payments
23%

Lending

2019
2021

12%

12%

8%

9%
2%

E-money AccountBank Account33%

Microfinance NGO

27%

Remittance12%

Blockchain/Crypto

12%

5%

Cooperatives

Uptake of Financial Services (% of Adults)

Investments/Wealthtech

4%

Top 3 Digital Payment Methods

56%
Mobile Wallet64%

36%

2019

29%

25%
19%

2021

25%

23%
17%

Card Online

Swipe/insert Card
Formal AccountFormal Credit

Insurance

Sources: Fintech News Network Country Fintech Reports, BSP, VISA

52%

44%

Investment

2*as of December 2021

Regulatory Landscape

Regulations supporting financial innovation in the Philippines

Guidelines on theEstablishment ofDigital Banks

Regulations on EMoney and E-Money
Issuers

Guidelines for Virtual
Service Providers(VASPs)To distinguish digitalbanks as a distinct
classification and toprovide a framework
for its operation andestablishment

To foster thedevelopment ofefficient andconvenient retailpayment and fundtransfer mechanisms in
the Philippines

To encourage financial
innovation whilesafeguarding theintegrity and stability of
the VASP financialsystem

Adoption of Digital
Payments for
Government
Disbursements andCollections

Act on Recognizing
Digital Assets (Underreview)To facilitatetransactions bypromoting the use ofdigital payments forgovernment
disbursements andcollections

To clarify andinstitutionalize the rules
regarding digital assets,with the central bank as
lead agency for EMoney and SEC as leadagency for virtual assets

3Virtual Asset Service Providers (VASPs)
Bangko Sentral ng Pilipinas Regulation

VASPs refers to any entity that offers services or engages in activities
that provides a facility for the transfer or exchange of Virtual Assets(Virtual Currencies and Virtual Tokens), which involve the conduct ofone or more of the following activities:
1.
2.
3.
4.

Exchange between VAs and fiat currencies
Exchange between one or more forms of Vas
Transfer of Vas; andSafekeeping and/or administration of VAs or instruments enabling
control over VAs
Opportunities for the PSE:
Provides an avenue for collaboration with VASPs, and explore
ideas on developing a digital assets platform

Source: BSP

4

Fintech Institutions in the Philippines
As of December 31, 2022

Number of BSP-registered Institutions
Number of EMIs

Number of VASPs

Number of Digital
Banks

71

19For MSMEs6
using
Gcash and PayMongo

Number ofusers

71M

55M

Number ofsavings accounts

5.3M

1.4M

Number ofinvestment
accounts

3.4M

Source: BSP, Philippine News Agency, Globe, Maya, various news articles

5Enabling Stock Trading through e-Payment Platforms
GCash and Maya

Collaboration between:
Philippine Stock Exchange

GCash and Maya are micropayment service
channels that transforms the mobile phone
into a virtual wallet for secure, fast, andconvenient money transfer.
Buy Prepaid Load

Stock Brokerage Firms
E-Payment Platforms

Pay Bills
Send Money
Shop Online
Get a Loan

This initiative aims to activate the untapped
potential of the Philippine equities market bylaunching an in-app stock trading platform,
with the PSE as a technology provider.

6

Data Analytics Platform

The PSE Equities Information Platform (PSE EQUIP) is adata analytics platform developed specifically for retailinvestors to enable them to access comprehensive andreliable information on the Philippine stock market (i.e.,democratize access to market data).
Target Launch: April 2023

Features:
Real-time Market Data and News
In-Depth Stock Analysis
Stock Screener
Stock Reports
Personalized Portfolio
7

IPO Subscription Application

Companies doing an Initial Public Offering (IPO) at the PSE are required tooffer 10% of their IPO shares to Local Small Investors (LSI). To facilitate
and widen the access to IPOs by LSIs, PSE digitalized the LSI subscription
process with the launch of PSE EASy (Electronic Allocation System) in
2019. This has resulted in more than a six-fold increase in the participationof LSIs in IPOs, from less than 1% of the 10% allocation to more than 6%.
An upgrade to the PSE EASy platform is scheduled to be launched during
the first half of this year which will enable LSIs to invest in other securityofferings (e.g., follow-on-offerings, stock rights offerings, and even retailtreasury bonds) and incorporate a payment platform within PSE EASy forthe convenience of LSIs.
IPOs in the PSE are required to offer 10 percent of
their offering to LSIs, which are retail investors
intending to subscribe to a minimum board lot.

8Digitalization Initiatives in the Fixed Income Market
Electronic Securities Issue
Portal (e-SIP)
E-SIP, which was launched in April
2021, streamlines and digitalizes thereservation process for bondissuances in the country’s capital
markets. The platform enables
issuers to expand their reach by
selling them online.

Digital Bonds issued throughDigital Registry and Depository
The digital bonds were issued asPhilippine Depository & Trust
Corporation’s proof of concept
which utilized a blockchainpowered digital registry and digitaldepository.
The first digital bond was issued byUnion Bank of the Philippines
in June 2022.

Government Securities (GS)
Digitalization Roadmap
A four-phase Bureau of Treasury
initiative to enhance retail investor
access to government bonds andreduce friction costs.
Allows for purchase of GS in theprimary market via
a blockchain-based mobile app.

9Thank You.
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