BSP still pushing for zero electronic fund transfer fees

PANGLAO, Bohol —The Bangko Sentral ng Pilipinas (BSP) on Monday said it is still pushing to remove electronic fund transfer fees, at least for small transactions, as it seeks to maximize the country’s payment system.

“Yes,” BSP governor Eli Remolona Jr. said, when asked if the central bank is still pushing to have zero transfer fees, adding that the central bank wants the “lowest possible fees” in terms of digital payments.

“That’s what maximizes what we call network externalities. If you have a phone, and you’re the only one with a phone, the phone is completely useless. If someone else has a phone, you can call that someone else, the value of the phone goes up. That value is maximized when everybody has a phone. It’s the same thing with digital payments,” he told reporters following the Central Banking Symposium.

Remolona last September said the BSP was working with banks to remove interbank transaction fees, saying the reserve requirement ratio (RRR) — the amount of cash a bank must hold in its reserves against its deposits — could be reduced to 0% during his term.

With a 0% reserve requirement ratio, banks could utilize the reserves instead of parking them with the central bank without any interest earned, which could then offset the costs incurred by banks for interbank transfers.

To recall, the BSP last year released a draft circular that would remove the cost of person-to-person electronic money transfers and the cost of payments to micro, small, and medium enterprises (MSMEs).

It also provides that transfers would be free of charge for personal transactions if within the threshold that would be set by the BSP, either as a remittance or for lending not conducted in the course of business, and these do not regularly exceed 10 times a week.

BSP deputy governor Mamerto Tangonan in February said banks have asked for two years as a soft landing for them to adapt to the proposed removal of interbank transfer fees, something that the Monetary Board will still have to decide on.—LDF, GMA Integrated News