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

, but we clearly still have quite a long way to go. beyond the metrics, ladies and gentlemen, we should focus on the real goal : that of reaping the advantages of an effective insolvency regime. the fria is a major reform designed to promote investor confidence and contribute to financial stability and sustained growth in our economy. however, the passage of the fria is really just the jump - off point in achieving that goal. what are the benefits of an effective insolvency regime? to say that the presence of an effective insolvency regime is a pillar of market confidence seems contradictory, doesn ’ t it? especially because we do not expect real investors to embark on a business or an economic endeavor with failure in mind. however, part of a sound business plan is knowing what you are up against – including what would happen to you and your investment, should your business turn sour. indeed, market exit ( even if it is “ forced upon you ” ) is an integral part of the business life cycle. the principle is this – if investors ( and banks ) know that there are clear rules that govern recovery, they become more willing to take on new ventures and businesses. bis central bankers ’ speeches when you extend this principle across the many current and potential investors across markets, it then becomes intuitive and easy to appreciate that a sound insolvency regime builds confidence and is economic growth - enhancing. in addition, it also supports financial stability. let me illustrate. from the point of view of the investor, an effective insolvency regime provides a framework for the terms on which they can be willing or prepared to lend. more particularly, the predictability and confidence in loan recovery upon default give the investors specific parameters, including price points, for their lending. in several cases, this has led to increased credit availability, lower cost of credit, or both at the same time. the experience in brazil shows that the broad bankruptcy reform in 2005 that established greater protection to credit had led to a significant increase in the total amount of total debt ( a reported 10 - 17 percent increase ) and in the total amount of long - term debt ( 23 to 74 percent increase ). in other words, there was also a lengthening of debt maturities. the same study also reported a 7 to 17 percent reduction in the cost of debt financing for brazilian firms. from the broader macro point of view, a clear insolvency regime encourages entrepreneurship, when this provides