A Philippine lawmaker has formally kicked off the legislative process for a virtual banking law, saying that it’s the right time to move when the industry is still in its early stages in the country.
According to the lawmaker, Joey Salceda, the rise of virtual banking “is inevitable” in the Southeast Asian nation.
There are only two virtual banking players in the Philippines at present, both foreign: Malaysia’s CIMB Group and ING Bank NV of the Netherlands.
Mr. Salceda has filed a bill to provide for a regulatory framework for virtual banking, a prelude to its introduction in the House of Representatives.
“The opportunity for regulation is clearly now, when the industry is yet to go in full swing,” Mr. Salceda, who is chairman of the House of Representatives Ways and Means Committee, says in a statement on January 6.
He says the bill also aims to expedite the rollout of “critical anti-poverty measures” and help achieve “inclusive growth goals” in a country where roughly one-third of the population own mobile phones.
“Marrying widely accessible digital platforms such as mobile phone applications with conventional banking strategies such as deposits and micro-lending, virtual banks are able to provide financial services at much more favorable rates, as they do not incur such expenses as establishing and securing branches and maintaining automated teller machines,” he says.
He adds that the high share of mobile phone owners combined with a rising middle class suggest that the Philippines “should expect a population eager, willing, and able to access the services provided by virtual banks”.