By Lee C. Chipongian
Philippine Deposit Insurance Corp. (PDIC) President Roberto B. Tan said there seems to be no need – at least for now – to craft new regulations that would cover the insurance of quasi-deposits such as electronic money (e-money).
Tan said they have no timetable when they will recommend the handling or how to deal with quasi-deposits but at this point, there is no urgent requirement to consider quasi-deposits as regular bank account deposits which are insured by the PDIC. Under the PDIC Charter, bank deposits are insured up to a maximum ₱500,000 per depositor per bank.
Besides, additional insurance coverage could mean increasing PDIC’s Deposit Insurance Fund (DIF).
“(This is) part of the things we’re looking at but there’s nothing definite on it,” Tan said in an interview. “We need to really find out whether there’s a need for it (insurance coverage for e-money) or not.”
E-money refers to money that exists in banking computer systems that may be used to facilitate electronic transactions. In the Philippines, it can refer to “e-load”, a fast growing segment where money is electronically stored in cash cards, stored value cards or e-wallets via mobile phones and other devices to settle payments. These are considered quasi deposits and not covered under PDIC.
Last August, Tan disclosed for the first time a PDIC study to include e-money as part of its insurance coverage.
According to the Bangko Sentral ng Pilipinas (BSP), e-money is more of a transactional account. By definition, an “e-money account is not construed as a deposit, it may not earn interest, and is not covered by deposit insurance.”
There are five million active e-money or e-wallets accounts in the Philippines in 2018, based on BSP data. This is a growth of 132.7 percent year-on-year or from 2.2 million in 2017. Pre-paid cards linked to e-money increased 12.5 percent to 28 million accounts in the same period.
The total e-money inflow transactions amounted to ₱546.4 billion last year, up 13.4 percent year-on-year. E-money outflow transactions also went up by 13 percent to ₱543.7 billion.
The BSP has been encouraging a cash-less or “cash-lite” payments system in the last five years or so.
They have targeted to increase cash-less transactions from a mere one percent in 2017 to 20 percent of all payments transactions by next year.
In another five years, BSP Governor Benjamin E. Diokno expects “e-payments” to account for almost 50 percent of all payments transactions in the Philippines.
In the meantime, PDIC is working with the Asian Development Bank to complete the study on how to treat quasi-deposits and if these should be insured similar to regular deposits.
E-money issuers or EMIs are currently regulated by the BSP. Presently, there are 30 banks as EMIs, two non-bank EMIs and 12 pure EMIs such as Globe/G-Xchange for its G-Cash, PayMaya, AliPay, and Grab’s GPay.