By Ignacio R. Bunye
On January 30, 2023, President Ferdinand Marcos, Jr. signed Executive Order (EO) No. 14, approving and adopting the Philippine Development Plan (PDP) 2023-2028. The EO formalizes the PDP’s goal of “reinvigorating job creation and accelerating poverty reduction toward a prosperous, inclusive, and resilient society.” The PDP’s approval is set against the backdrop of socio-economic gains and challenges.
As the government sets out to implement its plans for the next five years, two things must be considered. First, we must make sure that we sustain the country’s economic growth. Second, we must work together to address the binding constraints to the country’s development.
A key strategy identified in the PDP is promoting an inclusive, innovative, and healthy financial sector. This involves financial literacy, improving access to digital financial services, and intensifying consumer protection among others. These plans have corresponding policy instruments that were outlined in the PDP’s legislative priorities, namely the Financial Accounts Regulation Act, Digital Payments Act, Internet Transaction Act, and Banks Deposits Secrecy Bill.
For consumer protection, the Financial Accounts Regulation Act aims to tackle cybercrimes by prohibiting social engineering schemes and money mules while the Internet Transaction Act aims to regulate business-to-business and business-to-consumer online transactions, including digital financial services. For government modernization, the Digital Payments Act authorizes relevant government institutions to adopt digital payment systems for efficient financial transactions and improve transparency in collections and disbursements.
Lastly, the Bank Deposits Secrecy Bill aims to strengthen the banking system’s capacity to address money laundering, tax evasion, and similar crimes. It allows the Bangko Sentral ng Pilipinas (BSP), in the exercise of its supervisory powers, to examine bank accounts in cases of fraud and unlawful activity. The Philippines is the sole country where the central bank has no authority to look at bank deposits, and our Bank Secrecy Law is the only remaining bank secrecy law in the world. Relaxing some of its restrictions can help the Philippines catch up with international transparency standards.
These policies can help realize the administration’s plans for a strong financial sector and can create an enabling environment for financial institutions to introduce digital payments innovation, consumer protection mechanisms, and financial inclusion initiatives.
Private sector participation
With the potential benefits of these proposed policies, stakeholder support is crucial. Support can be done through participation in public hearings, consultations, drafting of implementing rules and regulations (IRRs), and policy implementation. The private sector can take the opportunity to contribute to policy discussions, especially for policies that are in line with their goals and values.
A good illustration of this is the support shown by the Bank of the Philippine Islands (BPI), through the Bankers Association of the Philippines (BAP) for the Financial Accounts Regulation Act. BAP has participated in hearings in the House of Representatives and worked with key legislators and industry members to promote the bill’s goal of strengthening mechanisms that will deter cybercriminals from victimizing banking customers through scams and other social engineering schemes. This participation is all the more needed as we await the bill’s approval in both chambers of Congress.
Sustained collaboration for the country’s development
It is encouraging to see that the government has been involving the private sector in key initiatives. For instance, the PDP highlights the importance of partnerships with the private sector, especially in reconfiguring public-private partnerships (PPPs) and the creation of the Private Sector Advisory Council (PSAC). PSAC members are industry leaders who provide expert views on sectoral issues, such as digitalization, agriculture, health, jobs, and infrastructure.
In an interview with members of the media during the BPI RISE (Reinforcing Inclusive Support for Micro, Small, Medium Enterprises) Bonds listing ceremony last January 30, BPI President and CEO Jose Teodoro “TG” Limcaoco stated that the bank is “excited about the government’s thrusts to bring in the private sector to help with infrastructure.” He also expressed BPI’s support for the government’s PPP projects. This is a testament to BPI’s vision of building a better Philippines – one family, one community at a time. This vision signifies the bank’s commitment to serving Filipinos to the best of its abilities, including working with the government for policies that are aligned with the thrust of financial inclusion, digitalization, and sustainability.
Stakeholder participation in reforms is a mark of a well-functioning democracy that can significantly impact the lives of each and every Filipino. By working with the government on policies that will strengthen our economic performance, we can sustain our growth momentum and address existing challenges. By participating in future public policy discussions, we ensure that we build and maintain a strong financial sector.