benjamin e diokno : qr - ph event - payment - to - merchant ( p2m ) pilot launch keynote message by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), during the qr - ph event : payment - to - merchant ( p2m ) pilot launch, 29 april 2021. * * * good afternoon to our esteemed guests from the payments industry, to our colleagues from the government, to our partner institutions, ladies and gentlemen. we are very pleased that you are with us today, to witness yet another momentous event in our digital transformation journey. the bsp ’ s deliberate approach to further digitalization is always motivated by evidence - based policy formulation. in 2019, five priority use - cases were identified in a national diagnostic study jointly undertaken by the bangko sentral and the better than cash alliance. these 5 use cases account for 97 % of retail transactions in the country. these 5 use cases were identified for prioritization. payments to merchant tops the list as it captures over 70 % of the total payments in the country. as such, it is important to strategically address the challenges and issues that impede this critical sector. with such a large base and low penetration of merchants utilizing and accepting digital channels, the potential is huge. to address some of the key challenges in digitalizing merchant payments, the bangko sentral embarked on initiatives that promoted the widespread use of qr codes for payments. the simplicity of qr code - enabled payments gives it the potential to reach even the smaller players which require less expensive infrastructure to implement. only a smartphone and the internet are needed. the value proposition of paying through qr code was bolstered with the issuance of the national qr code standard, dubbed as “ qr ph ”. qr ph transformed the fragmented qr - driven payment services into interoperable payment solutions. the full implementation of qr ph can likewise contribute towards the attainment of a coinless state as qr ph - enabled payments may be a viable alternative to coins. it was on 20 november 2019 when we launched the qr ph for person - to - person payments or “ qr ph p2p ” which primarily catered to remittances and payments within the informal sector. from only 6 pilot participants then, now we now have 20 participants as of end march 2021. from november last year to march this

##ans to experience the same convenience when they use the qr ph in their daily business transactions. we understand that to encourage the wider adoption of qr ph p2m, it must be affordable, ubiquitous and accessible even in the remote areas. thus, the bsp and the payments industry, led by the philippines payments management, inc., will continue to closely work together in ensuring that payment products and services remain useful and relevant to help filipinos reap the benefits of using digital payments. this pilot launch of the qr ph p2m provides the perfect occasion for another positive report. we are pleased to announce the philippines boosted its digital payments adoption in 2019. this is based on the most recent e - payments measurement conducted by the bangko sentral with the assistance from the alliance. the volume of monthly digital payments in the philippines grew from 10 % in 2018 to 14 % in 2019. this corresponds to a 27 % increase in volume, driven primarily by high - frequency, lowvalue retail transactions, like merchant payments. meanwhile, the value of monthly digital payments grew to 24 % of all transactions in 2019, up from 20 % in 2018. all these happened before the covid - 19 pandemic. early estimates from the first half of 2020 also provides encouraging results where digital payments rose to 17 % of all monthly payments. in both results, the p2m and p2p use - cases proved to be driving the expansion of digital payments in the country. this only confirms that we are on track in providing the necessary interventions to promote digitalization of consumers and merchants alike. we ’ ve seen very promising growth in digital payments in the last two years – we now must ensure that this growth is inclusive and that digital payments are serving all filipinos. 2 / 3 bis central bankers'speeches in order to continue our transformation to a cash - lite economy, we need to keep up and strengthen our whole - of - government approach and collaboration with relevant stakeholders both from the public and the private sector. another key requirement is having the robust measurement and monitoring system that would allow us to regularly track indicators to assess our progress on the deepening of digitization. all these vital components were unified and harmonized in the recently issued bsp digital payments transformation roadmap, sstrategically anchored on three critical pillars : 1. digitalizing the payment streams ; 2. enhancing the robustness and resilience of the digital finance infrastructures ; and 3. strengthening governance by