The Bangko Sentral ng Pilipinas (BSP) is set to issue up to four new digital bank licenses in a bid to expand the digital banking landscape in the Philippines.

This move follows the lifting of a moratorium that had been in place since 2021.

As highlighted by BSP senior director Melchor Plabasan in The Manila Times, the central bank aims to foster greater competition and financial inclusion through the introduction of new players in the digital banking sector.

The BSP has outlined specific criteria for new applicants, emphasising the need for innovative services and a strong value proposition.

Existing banks are also being assessed to ensure they meet the regulatory requirements for digital banking, should they choose to convert their existing licenses.

Plabasan stated that the BSP is committed to maintaining a level playing field and preventing regulatory arbitrage.

This means that all institutions, regardless of their origin or current license type, will be subject to the same rigorous standards.

The application window for new digital banking licenses will open on 1 January 2024.

The BSP has indicated that the licensing process could take approximately three to four months, assuming applicants submit all the necessary documentation promptly.

Currently, six digital banks operate in the Philippines – UNO Digital Bank, Tonik, UnionDigital Bank, Overseas Filipino Bank (OFBank), Maya Bank, and GoTyme Bank.

The addition of new digital banks could potentially lead to increased access to financial services, particularly for underserved segments of the population.

Featured image credit: Edited from Freepik