Top 5 Fintech Stories That Defined the Philippines in 2022

Top 5 Fintech Stories That Defined the Philippines in 2022

by January 3, 2023

For a developing fintech market like the Philippines, 2022 was yet another year of groundbreaking developments and impressive growth. The Philippines has a youthful population, and digital literacy is rapidly on the rise across the sprawling collection of islands.

Fintech solutions and startups are helping meet economic needs and establishing connections throughout the Philippines, and this gradual but progressive growth has never been more evident as it was in 2022. From blockbuster funding reveals to advancements in digital currencies on the blockchain, 2022 was an exciting year for developments affecting the fintech space in the Philippines.

Funding growth for Philippines fintech in 2022

The participation of returning investors indicated strong interest among the fintech grassroots in the archipelago, a recurring vote of confidence in the growth of the local fintech industry throughout 2022.

In the second quarter of 2022, PayMaya parent company Voyager Innovations became the latest fintech in the Philippines to achieve unicorn status with the blockbuster raising of US$210 million in new funds. The firm behind the PayMaya digital wallet and the MayaBank digital bank raised the latest funding from its seed investor SIG Venture Capital, the Asian venture capital arm of the SIG public limited company.

The new funding coming from other existing shareholders telecoms outfit PLDT, Chinese gaming juggernaut Tencent, and funds managed by International Finance Corporation (IFC) like the IFC Emerging Asia Fund and IFC Financial Institutions Growth Fund (among others) is being used to spearhead the expansion of PayMaya service offerings in cryptocurrency, micro-investments, and insurance to name a few.

The funding also helped Voyager to launch Maya Bank services such as savings and credit so they can be made available seamlessly across PayMaya’s platforms, serving both the service provider’s 47 million registered consumers as well as its micro, small, and medium-sized enterprises (MSMEs) segment. Maya Bank has been in pilot testing since March 2022, and is recording good consumer interest as one of six digital banking applicants in the Philippines.

But the Voyager funding found was just one of the growth stories impacting Filipino fintech. The Sumitomo Mitsui Banking Corporation (SMBC) also markedly increased its funding in the Rizal Commercial Banking Corporation (RCBC) in 2022, with a capital injection of PHP 27.126 billion (approximately US$460.78 million) more than tripling SMBC’s stake in RCBC to 20 percent.

Not to be outdone, in the same month as the RCBC funding, GCash e-wallet’s (and PayMaya competitor) holding company Mynt raised over US$300 million in funding, topping its valuation at over US$2 billion. The financing round featuring investment giant Warburg Pincus, venture capital firm Insight Partners, existing Mynt investor Bow Wave Capital, Itai Tsiddon, Amplo Ventures, telecom Globe, and Ayala helped grow the company’s digital financial services as much like PayMaya and RCBC, GCash experienced a boom in consumer adoption — seeing record 19 million app logins daily and daily active transactions of 12 million, another record.

Mynt’s progress saw it tripling its gross transaction volumes from 2021, approaching PHP3 trillion of the gross transaction value. Such volume growth was easy to see why funding interest in these Philippines fintechs are at an all-time high.


Licensing moratorium on crypto, payments, and digital banks

One of the big fintech developments of 2022 was the central bank of the Philippines, Bangko Sentral ng Pilipinas (BSP), announcing that new applications for Virtual Asset Service Provider (VASP) licenses will no longer be accepted for the next three years.

Existing VASP license holders who wished to expand operations, could still do so as long as they met the threshold for the Supervisory Assessment Framework (SAFr) composite rating, and applications that had passed the second stage of the license approval process would still be entertained — provided the requirements and the documentation were all up to the submission standard.

In this manner, the BSP hopes to ensure due consideration of each applicant’s risk management systems, suitability assessments, and onboarding processes. The central bank was also guaranteeing that consumer financial education and awareness within Philippines society was being considered in the evaluation, especially for the non-incumbent license applicants who had been expected to meet compliance standards by August 2021.

That was not the only license moratorium imposed last year, a three-year ban on all new digital banking licenses was announced too. This was to allow the six approved licensees to monitor their impact on the banking industry, while permitting space for them to exercise healthy competition without saturating the digital banking space.

This followed on from when the central bank also fixed a two-year moratorium on giving out electronic money issuer (EMI) licenses for non-bank financial institutions, seeking to likewise limit the number of participants who might not have carried out adequate due diligence, having already issued licenses to 35 non-bank EMIs along with 29 banks.

Yet the BSP’s former governor at the time did qualify exceptions for non-bank EMIs who presented strong, unique value propositions with innovative business models that would bear trialing to see if they would complement the digital payments and financial ecosystem in the country.

But as of end-November 2022, the central bank’s governor said that they were looking at selectively lifting the moratorium imposed on EMIs, as public awareness of digital scams and fraud was on the rise — the fintech sector in the Philippines was progressively maturing in 2022.


6 digital banks get the full green light to operate

BSP Green Lights All Six Digital Banks to Launch Full Operations

While the BSP decided to call a halt to fresh applications for digital banks in 2022, the six applicants that had already passed their preapproval checks in the Philippines were all granted the Certificates of Authority (COAs) to pursue full operations.

By the first half of the year, Tonik Digital Bank, the aforementioned Maya Bank, UnionDigital Bank and GoTyme Bank had all obtained their COAs, after first operating in a limited capacity as the fledgling banks initially sought to iron out their operational and compliance kinks.

Eventually the institutions met the BSP’s stringent pre-operational requirements, which included meeting adequate capitalisation benchmarks, risk and structural governance standards, as well as adequate preparedness of information technology systems to meet scaled up digital banking needs.

The last two successful entrants, LANDBANK’s digital arm Overseas Filipino Bank and UNO Digital Bank were granted their COAs by the second quarter of 2022, showcasing the healthy appetite for a full-fledged digital banking landscape in the Philippines at a quicker pace.


New Governor heads up the BSP

Diokno Steps Aside to Welcome Medalla as New BSP Governor

As can be seen above, the Philippines central bank Bangko Sentral ng Pilipinas has been instrumental in advancing the country’s digitalised economy ambitions. One person key to pushing forward the country’s aims for financial inclusion for at least 70% of the Filipino adult population was BSP governor Benjamin Estoista Diokno, an economist who stepped down to become the 32nd Finance Secretary of the Philippines.

Diokno stepped down to make way for Felipe M. Medalla to become the sixth Governor of the BSP. Medalla has been serving on the BSP board since 2011, and is also a veteran economist who is no stranger to both national financial affairs as well as politics — the new Governor has a lifetime of public service, having served in the administrations of four Philippine presidents over more than four decades.

The BSP claims that 41 million adult Filipinos have access to basic financial apparatus like bank accounts and e-wallets, and former Governor Diokno played a big role in encouraging financial inclusion with the introduction of the National Strategy for Financial Inclusion (NSFI) 2022-2028.

Diokno also guided the awarding of the country’s first digital banking licenses and approved framework. Seasoned economist Medalla will now take over these strong efforts and continue inculcating the burgeoning fintech sector in the Philippines beyond 2022.


Wholesale CBDC pilot takes off in 2022

As part of ongoing initiatives to introduce a stabilised payments infrastructure in the Philippines, the BSP announced plans in mid-2022 to trial a wholesale central bank digital currency (CBDC). Unlike other retail CBDC projects that orients around consumer interest in a digitised national currency, a wholesale CBDC is intended to drive use cases for large-volume transactions, round the clock, and targets banks and other large financial institutions predominantly.

Dubbed Project CBDCPh, outgoing central bank Governor Benjamin Diokno highlighted some of the potential benefits a wholesale CBDC might contribute to the Philippine payments ecosystem, namely minimising commercial bank settlement risk exposure for equities, operating an intraday liquidity facility, and supplying an alternative for cross-border payment remittances that are still a thorny issue for many overseas transactions.

Project CBDCPh is intended to provide a buffer for these settlement headaches, and is part of an overarching project being managed by a central team that is tackling critical operational issues. These include a whole range of considerations including governance and operational needs, policy and regulatory requirements, legal and compliance matters, technological infrastructure developments, payment and settlement models, reconciliation procedures, and risk management.

At this pilot stage, Project CBDCPh will examine potentially far-reaching applications of wholesale CBDCs to address existing issues, while providing advantages over traditional methods for financial hubs to conduct transactions. Then-Governor Diokno believed that takeaways from the CBDC pilot will greatly inform the “BSP’s medium- to long-term roadmap” in how to shore up the emerging Philippines payments ecosystem.


The Philippines fintech space has taken multiple mighty steps in 2022 to establish a vibrant financial scene, powered by tech innovations to address current and looming issues. Pushing the financial inclusion agenda was high on the active central bank’s list of to-do’s last year, but and it is safe to say the raft of measures taken in 2022 will go some way to helping forecast what the Filipino digital economy will look like for years to come.


Featured image credit: Edtide from Freepik here and here