The Bangko Sentral ng Pilipinas (BSP) is set to print the first five million of the national ID cards this year, beginning in November.
“Finally, it will soon to be a reality,” said BSP Governor Benjamin E. Diokno after noting that the country’s national ID program is a long, 25-year journey. “This year, the BSP is going to print five million IDs for the poorest of the poor; the rest by 2022,” he told the participants of the Philippine Society for Public Administration virtual conference. They are expected to print 107 million IDs by 2022, the end of the Duterte administration.
Diokno highlighted the urgent need for a national ID which is both a digital and physical ID, as the financial system transitions more from cash-heavy to cash-lite in three years with the expansion of e-payments in the country.
“We intend to have more available innovative digital financial products and services that catered to the needs of consumers (and) these services will be enabled by the national ID system,” the BSP chief said in another forum hosted by the Makati Business Club on Wednesday with other business groups on advancing e-payments via public-private partnership. “It will also be supported by modern payment services that will facilitate real time processing of financial transactions,” said Diokno.
In the same webinar which was participated by both public and private sectors, Ayala Corp. chairman and CEO Jaime Augusto Zobel de Ayala said the national ID is an important component of the Know-Your-Customer (KYC) requirement. “We’re happy that government is spearheading a digital ID system … (it’s) a long journey and a big one,” he said. The Ayala group owns Bank of the Philippine Islands and Globe Telecom and its Gcash. To make e-payments work, he said the national ID is critical.
Diokno reiterated that with the national ID, Filipinos with no bank accounts can easily apply for an account since with the digital ID, they could comply with banks’ KYC. “It would also make it easier to distribute welfare grants to the poor, as necessary,” he said.
The one-ID, national ID “would render the many IDs, such as the senior citizen ID, Voter’s ID, the Tax Identification Number, PhilHealth ID, among others, superfluous, ” he said. The e-KYC feature of the Philippine Identification System (PhilSys) is a “game-changer” in digital connectivity such as in clients onboarding and in the delivery of financial services.
Earlier this month, Diokno inspected the ID printing facilities at the BSP Security Plant Complex in Quezon City where it produces banknotes, coins and refines gold. He announced that he has seen the machines to be used for offset printing, card body punching and the equipment to collate the ID cards.
Before the pandemic, the BSP was prepared to produce initially 23 million of national IDs this year, but there were technical delays on the side of the implementing agency of the National Identification System which is the Philippine Statistics Authority. The PSA is expected to start registration process of “at least” five million Filipinos from the low-income households in the last three months of 2020.
PhilSys was signed into law in 2018. The BSP will produce the national ID in a direct government-to-government deal with PSA.
Basically, the national ID will make it easier for Filipinos to have their identification authenticated when transacting with both the government and the private sector. The IDs will contain both demographic data and biometric information such as photograph, fingerprints and iris can.
Diokno has said that financial digitalization will be complemented with the national ID since a “comprehensive and reliable database of citizens” will mean a credible and nationally accepted proof of identity.
The BSP wants 50 percent of all financial transactions to be digital by 2023 and that 70 percent of all Filipino adults will enter the banking system as account holders. “With the pandemic and the quantum jump in the use of digital payments, I expect to reach both goals sooner— say in December 2022,” said Diokno.
Under the BSP’s National Retail Payment System framework, the PESONet and InstaPay was established as electronic funds transfer systems.
Diokno said PESONet and InstaPay “came in handy” during the pandemic when areas were in lockdown, and not surprisingly, its volume and value surged since March. The transaction volumes for PESONet and InstaPay jumped by 143 percent and 820 percent respectively in August.