and for ecommerce to enable msmes. payment products can be built on instapay that will enable merchants to accept digital payments from both e - money and bank accounts even without a pos. by using digital payments, msmes will be able to build a rich digital transaction history which can help establish their creditworthiness and provide them access to credit from formal lending institutions at a price that reflects their good risk profile. this shows that the benefits of using electronic payments especially by msmes go beyond convenience and affordability. electronic payments can even provide greater access to other financial services. these concrete developments mark a significant milestone in our journey towards modernizing the retail payment system in the country — - an accomplishment that would not be possible without the cooperation of the payments industry players with the bsp. we also recognize usaid which has provided the technical assistance for this strategic initiative. 1 / 3 bis central bankers'speeches this journey officially began in december 2015 when we launched the national retail payment system project or the nrps. as a policy framework, the nrps lays down the principles and necessary elements of our envisioned safe and efficient retail payment system. let me just highlight for a moment the concept of efficiency. efficiency in the retail payments is essentially about speed, convenience and affordability. these are features and requirements that can clearly be supported by a shift to electronic payments. and that is why a key outcome of the nrps is the increased adoption of electronic retail payments. when we decided to embark on this journey, we knew from the get - go that we have our work cut out for us. as it stands, the share of electronic payments in the estimated 2. 5 billion monthly payment transactions in the country is a measly 1 % based on a baseline survey conducted in 2013. we want to bring this to 20 % within the next 3 years, or by 2020. some might think this as quite an ambitious target. and perhaps it is. but realizing how important a shift to electronic payments is for the country, we knew we had to embrace this target and buckle down to achieve it. so what is at stake? aside from the considerable cost - savings and productivity that it can generate for businesses, the government and the financial sector at large, a safe and efficient retail payment system can potentially transform the economy by enabling greater financial inclusion. as it facilitates low - cost and convenient transactions, our envisioned retail payment system supports the viable and sustainable delivery of a wide range of financial products that cater

to the needs of all users, especially the small - value, high frequency transactors of the lowincome segment. a well - designed retail payment system serves as a pillar of an inclusive and expansive digital finance ecosystem – one that is able to meet the diverse needs of all users in a manner that is convenient, sustainable, affordable and reliable. just as it is a goal, financial inclusion is also a tool for achieving an efficient retail payment system. as more people participate in this system, greater economies of scale are secured – thereby making the system even more efficient. the unserved market of the payments industry is still huge, considering that based on the latest world bank findex report, only 31. 3 % of adult filipinos have a transaction account which enables them to participate in the retail payment system. by enabling its user to store funds and use electronic payments, a transaction account can provide the unbanked the means to eventually avail of more sophisticated products, like credit, insurance and investments. providing a transaction account to the remaining 69 % untapped potentially high - volume market therefore presents opportunity for financial service providers to expand their customer base and add new income streams. clearly, therefore, we cannot overemphasize the importance of establishing a safe and efficient payment system which the nrps aims to achieve. the nrps provides the framework for our deliberate approach to securing the promised gains of modernizing retail payments for the benefit of the consumers, the industry and the economy as a whole. this approach is built on three core principles : interoperability, inclusivity and “ coopetition ”. interoperability is defined as a state in which customers can transfer funds from their own account to any bsp - regulated transaction account using any device. this means that a customer need only maintain one account – whether a bank or an e - money account – to be able to conveniently and affordably transact with anyone in the system. the inclusivity principle, on the other hand, demands that all qualified financial service providers must be able to effectively participate in the system – regardless of their size and type of transaction accounts offered. this fosters greater competition and spurs innovation to better support the diverse needs of the consumers. the third core principle espoused by nrps is “ coopetition ” – a portmanteau ( combination ) for “ cooperation ” and “ competition ”. nrps promotes both cooperation and competition in the 2 / 3 bis central bankers '