The Bangko Sentral ng Pilipinas (BSP) has announced that it will begin accepting applications for new digital banks starting Jan. 1, 2025, following the lifting of a moratorium that has been in place since Aug. 31, 2021.
The move will allow for a maximum of 10 digital banks to operate within the country. Since the introduction of the Digital Banking Framework in December 2020, six digital banks have been operating in the Philippines. The lifting of the moratorium will permit up to four additional licenses to be issued, potentially through the conversion of existing banks’ licenses or new entries into the market.
“With this limit, the BSP can closely monitor developments in the digital banking industry, obtain a broader perspective as these banks mature further in their operations, as well as assess the impact of the entry of new players on the banking system,” said Bangko Sentral Governor Eli Remolona Jr.
The application process for these new licenses will be rigorous. The BSP will assess applicants based on their value propositions, business models, and resource capabilities, in addition to the standard licensing criteria. These criteria include evaluating the transparency of ownership and control structures, the suitability of shareholders, and the fitness and propriety of directors and senior management. Applicants must demonstrate sufficient readiness to deploy digital solutions and the capacity for sustainable growth within the Philippine financial environment.
“Applicants must bring something new to the table,” said Governor Remolona. “We want to see unique product and service offerings that are different from those offered by existing market players. These offerings should have significant potential to reach broader clientele, particularly the untapped or underserved market segments,” he stated.
The decision to reopen the application window was influenced by the BSP’s assessment of the current operations of digital banks. The central bank considered the financial soundness of these institutions and their success in achieving the policy objectives of the Digital Banking Framework, which include promoting the wider adoption of digital financial services and expanding their reach to unserved and underserved segments of society.