NextGen Day

The issue of implementing rules and regulations (IRR) on extending the supply of internet connection via satellite services is seen by the Bangko Sentral ng Pilipinas (BSP) as further boosting financial inclusion and digital finance in the nation.

The IRR, issued on September 28 by the Department of Information and Communications Technology (DICT) under Department Circular No. 002, Series of 2021, seeks to foster the growth of an inclusive and dynamic satellite sector by liberalizing access to satellite systems.

Increased access to satellite services is anticipated to hasten the deployment of internet connection for the country’s unserved, underserved, geographically remote, and disadvantaged regions.

With the issue of the IRR, banks, fintech firms, and other financial sector organizations will be led even further in their exploration of methods to use satellite technology for their operations, especially in increasing presence in disadvantaged areas.

“With improved rural connectivity, we see previously unserved and underserved areas being reached by digital financial services, particularly those designed for lower-income segments, such as remittances, bill payments, and transaction account opening,” BSP Governor Benjamin Diokno said in a statement Thursday.

As financial activities and services migrate to online platforms, internet connection is regarded as a key facilitator of financial and economic inclusion.

Banks and other financial service providers (FSPs) will be able to better serve rural regions with additional access points, such as automated teller machines and cash agent services that depend on an internet connection, as internet service is extended.

Meanwhile, with the introduction of the Philippine Identification System and its electronic know-your-customer service, increased internet connectivity would enable more unbanked rural customers and low-income areas to utilize digital financial services and benefit from digital advances.

Republic Act 11055, or the Philippine Identification System Act, was signed into law by President Rodrigo Duterte in August 2018. Its goal is to create a single national ID for all Filipinos and permanent foreigners.

The national ID card must be a legitimate form of identification that may be used to ease public and private transactions, school enrollment, and bank account creation.

It will also increase efficiency, particularly when interacting with government agencies since individuals would only need to show one ID during transactions.

“These advances will help to the BSP’s financial inclusion goals,” Diokno said. “First, 70% of the adult population should hold a transaction account by 2023, and half of all retail payments should be in digital form by 2023.”

The BSP urges FSPs to explore possibilities for innovation and market growth from this regulatory change in order to accelerate financial inclusion in the nation.

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