MANILA - Coin usage in the Philippines fell by more than half last year as the economy contracted and digital payments skyrocketed, the Bangko Sentral said on Thursday.
The BSP said Filipinos used coins less often while digital payments broke records as consumers and businesses avoided physical contact as part of efforts to check the spread of COVID-19.
“Based on end-2020 data, coin demand fell by 60 percent in value and 57 percent in volume, year-on-year. While softer economic activity may have partly led to the drop, broadening access to safe and convenient e- payment options may have also contributed to the decline in coin demand,” said BSP Governor Benjamin Diokno.
Payments made through InstaPay in 2020 meanwhile hit 86.7 million transactions, up by 459 percent compared to 2019. The value of payments also hit P463.4 billion, which was a 340 percent increase from the previous year, the BSP said.
The volume of PESONet transfers meanwhile surged to 15.3 million, up by 376 percent year-on-year. The value of PESONet transactions, meanwhile, rose by 188 percent to reach P951.6 billion, the BSP said.
The BSP meanwhile is eyeing to further reduce coin usage, with the Philippines becoming “coinless” and cash lite by 2025.
To achieve this, the BSP said it is aiming to promote the use of QR codes for digital transactions.
Poor internet connectivity and the high number of people without bank accounts, however hamper the growth of digital payments.
BSP data released mid 2020 showed around 51 million Filipinos were unbanked, or had no bank accounts or access to financial services. This number however is expected to have decreased following the government’s social amelioration programs, which set up various accounts for the poor so that they can receive financial aid during the pandemic.
The Department of Social Welfare and Development worked with e-wallet service providers G-Cash and Paymaya as well as various banks, pawnshops, and other remittance companies to achieve this.
As for connectivity, the BSP is advocating for the use of satellite broadband technology to provide connectivity in areas which are not serviced by the existing telecoms companies.
Diokno said 2020 and the pandemic accelerated e-payments and digital transactions. He expects the number of such transactions to continue to grow, but he doesn’t expect it will be at the same rapid pace.