felipe m medalla : full speed ahead for payments digitalization speech by mr felipe m medalla, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the launch of the usaid's strengthening private enterprise for the digital economy ( speed ), 10 january 2023. * * * i am a former professor of economics, so i have to clarify a few things. [ while micro, small, and medium enterprises ( msmes ) account for more than ] 98 percent of numbers [ of all enterprises in the philippines, they have a ] much smaller percentage of value. on the other hand, the top five banks account for, maybe, 60 percent of [ system - wide ] assets. and that is the way the economy goes. but nonetheless, every small transaction counts. let me cite another example. the person taking care of our kids eventually got married, then, because of the pandemic, their family had [ financial ] problems. we were able to transfer money to her because of e - payments [ electronic payments ]. all those aggregate statistics do not matter to me relative to that particular person that i care about, who helped us bring up our children. so, let us not be too focused on the value of assets and numbers over people. again, i would like to thank usaid [ united states agency for international development ]. you have a long history of cooperation with the bsp. of course, my partners in government, i will not mention each one - but if i must single out, your excellency, ambassador marykay carlson. our colleagues from the government and all our partners in the private sector, we have enjoyed, as i said, a very fruitful partnership with usaid for quite some time now. the accomplishments [ from our collaboration ] are so easy to see : instapay, our fast payment system, and - of course - what is now a very efficient substitute for all checks, pesonet. when you look at all the transactions taking place over those networks and all the other things that they facilitated, we have to celebrate. but of course, obviously, we can do a lot more and, clearly, project speed [ strengthening private enterprise for the digital economy ] - by the way, we in this country are very good at acronyms. for its part, the bsp has introduced several initiatives to facilitate smes'adoption of digital payments and financial services.

, the bsp ’ s participation in the green bond fund launched by the bank for international settlements ( bis ). the bsp also implemented the monetary board ( mb ) paperlite facility that resulted in the significant reduction of paper usage during mb meetings. in addition, the bsp installed energy - efficient mechanisms such as solar panels and inverter technology in air - conditioning systems. the bsp is now a member of the network for greening the financial system ( ngfs ), a group of central banks and supervisors organized to enhance the role of the financial sector in managing climate and other environment - related risks and mobilize capital to support the transition towards a sustainable economy. the ngfs membership is expected to strengthen bsp ’ s collaboration with counterpart regulators in building awareness and contributing to the effective management and mitigation of the impact of climate and other environment - related risks in the financial sector. moreover, we have a lot to share with respect to the country ’ s experience in coping with calamities and natural disasters. our recent experience with typhoon ulysses again reminds us that we should act fast and we should act now to address climate change. as a tropical country in the pacific, we should expect more destructive typhoons in the years to come. we have to be critical of our actions and decisions now as they shape the future of the country and the next generations. finally, complementary to the sustainable finance initiative is the digital payments transformation roadmap. the roadmap has these twin goals by 2023. first, driving the share of digital payments to 50 percent of total retail transactions by offering faster, more affordable, and secure payment options that provide greater convenience. second, expanding the financially included to 70 percent of filipino adults by onboarding them to the formal financial system through the use of payment or transaction accounts. the bsp ’ s priority policy initiatives aim to broaden the use of digital payment platforms as well as ensure that these are supported by robust infrastructure and governed by sound data standards. in closing, allow me to reiterate some key points : the banking system is in a strong financial condition going into the crisis. it remains resilient amid the pandemic. supervisory priority areas moving forward include monitoring of asset quality, declining profitability, liquidity and capital positions. financial sector reforms will be important in economic recovery such islamic banking, sustainable finance, and digital transformation as well as the timely enactment of fist and guide. lastly, and most importantly, despite the adverse