The wider adoption of digital payments in the Philippines is expected to have a positive impact on inflationary trends moving forward, according to the Bangko Sentral ng Pilipinas (BSP).
“Digitalization is one of the huge changes that will have an effect in lowering the inflation in the long run,” explained BSP Governor Benjamin E. Diokno during the recent gathering of journalists and opinion-makers of the Tuesday Club.
Aside from monetary and fiscal policies, technological advancements can help keep prices low and stable over the long term.
By making payments and transactions more convenient, digitalization reduces the costs of production and distribution for businesses.
At the same time, digitalization has made it easier than ever for consumers to gather information on products and services and make informed purchases.
Altogether, these forces encourage competition among enterprises to capture or maintain market share, which in turn helps keep consumer prices low and stable.
Under its Digital Payments Transformation Roadmap (DPTR) 2020-2023, the BSP pursues the twin goals of converting at least 50 percent of all retail transactions into digital, and onboarding at least 70 percent of the population to the formal financial system by 2023.
The share of digital payments to total financial transactions reached 20.1 percent in 2020 from 14 percent in 2019 and only 1 percent in 2013.
“I am very confident because we are ramping up the use of digital payments, that by the end of my term, we will reach the 50 percent target,” the Governor said. (Banko Sentral ng Pilipinas)