Philippines Digital Banks Attracted US$700 Million So Far as Investors Interest Peaks

Philippines Digital Banks Attracted US$700 Million So Far as Investors Interest Peaks

by April 24, 2024

In a promising development for the standalone digital banks in the Philippines, more than US$700 million has been invested by both local and global investors, indicating robust growth in this emerging industry.

As of the end of 2023, the number of digital bank depositors reached 5.9 million, reflecting increased public engagement and trust. The period also saw deposits double from P35 billion at the end of 2022 to P69 billion a year later, with the gross total loan portfolio also rising from P11 billion to nearly P25 billion.

Angelo Madrid

Angelo Madrid

Angelo Madrid, President of the Digital Bank Association of the Philippines (DiBA PH) and President at Maya Bank, commented,

“The significant and continued investment in the digital banking industry is a strong vote of confidence in its capacity to stimulate economic growth, create jobs, and expand access to savings and credit.”

He noted that strategic investors are crucial as the digital banks in the Philippines strive for profitability and expanded financial inclusion, with the industry typically taking five to seven years to reach a break-even point.

Henry Aguda

Henry Aguda

Henry Aguda, trustee at DiBA PH and President and CEO at UnionDigital Bank, added,

“This is seen as more than just financial support from the investment community; it recognises the sector’s potential to promote economic inclusivity and innovation, setting new standards for the future of banking in the Philippines.”

Despite hurdles such as the slow implementation of the national ID system and limited coverage of the national credit bureau, digital banks have managed to address gaps in the national financial infrastructure. Their digital-first approaches have also widened public access to banking services, highlighting the sector’s transformative impact.

Following the establishment of a new digital banking category by the Bangko Sentral ng Pilipinas (BSP) in 2021, which limited entries to six banks, all became operational by 2023.

These include GoTyme Bank, Maya Bank, Overseas Filipino Bank (OF Bank), Tonik Digital Bank, UnionDigital Bank, and UNO Digital Bank, which collectively founded DiBA PH to promote digital banking as a means of enhancing financial inclusion.

Nate Clarke, Trustee of DiBA PH and President and CEO at GoTyme Bank, stated,

“All our members have credible investors who are committed to the long-term growth of the Philippine market. We are eager to advance the industry as we stabilise the sector and expand our various initiatives, including extending credit.”

Featured image credit: Edited from Freepik