Notes on Regulation of Branchless Banking in the Philippines

Presenting CGAP findings on branchless banking regulation in the Philippines
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This update of CGAP's 2008 "Notes on Regulation of Branchless Banking in the Philippines" incorporates research conducted by CGAP in January 2010 regarding relevant legal and policy changes through the end of 2009. It is one of 11 country updates produced by CGAP as a part of the G20 Access through Innovation (ATI) Sub-Group's workplan.

The paper states that Philippines’ central bank, Bangko Sentral ng Pilipinas (BSP), has practiced a flexible but hands-on role in the emergence of mobile banking. BSP supports two different arrangements for mobile operators. In one model, banks are permitted to outsource activities to the mobile operator. In the second, a subsidiary of the mobile operator, Globe Telecom (Globe), offers virtual stored-value accounts. G-Xchange Inc is regulated as a remittance agent. Key points include:

  • There is an absence of clear guidelines on e-money issuance;
  • Restrictions on the use of agents hinders the further growth of branchless banking in the Philippines;
  • Banks are not allowed to outsource their inherent functions to third parties, nor their Know Your Customer (KYC) responsibilities;
  • Nonbanks may use remittance agents only for distribution of payments and for KYC.