Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said the country’s “Phil ID” will be available soon, owing to the real and urgent need for a digital identification system during the pandemic.
The financial digitalization, said Diokno, will be complemented with the implementation of the Philippine National Identification system (PhilSys) – “which will happen soon”.
“The (pandemic) crisis has highlighted the importance of having a comprehensive and reliable database of citizens. For one, it is imperative for the effective rollout of welfare benefits and other services,” said Diokno in a forum recently. “Once the national ID system is in place, all Filipinos will have a reliable and nationally accepted proof of identity.”
Diokno said earlier in August that the Philippine Statistical Authority is targeting to register in the fourth quarter this year some five million low income households for the national ID. Before the pandemic, the BSP was set to produce all 116 million national ID card at P30 each, for a total cost of P3.4 billion.
Diokno said the “Phil ID” will address the issues of getting unbanked Filipinos to join the banking system.
“(They) will have a proof of identity, which is a KYC (Know Your Customer) requirement in opening a bank account. As such, access to financial services will be easier and more people can actively participate in the country’s economic activities.” There are 51.2 million unbanked adult Filipinos based on the latest data.
Digitalization will increase access to financial services, particularly in remote areas where banks do not have branches, added Diokno.
The resulting lockdown and containment measures to control the COVID-19 outbreak in the country has accelerated the increase in the use of digital financial transactions.
The BSP said between March 17 the start of the enhanced community quarantine, until April 30, about four million digital accounts were created. Usage of both PESONet and InstaPay – two platforms for the electronic transfer of funds – have increased.
InstaPay usage went up by 740 percent year-on year in volume to 24 million in July, while PESONet increased by 137 percent year-on-year in volume to 2.6 million transactions.
Diokno wants 50 percent of all financial transactions to be digital in three years and that 70 percent of all Filipino adults will enter the banking system as account holders. “With the spike in usage of online banking due to the lockdown, these goals may be achieved earlier,” he said.