PH may fall short of 2028 digital payments target: BSP

The Philippines risks missing its 2028 target of converting 70% of total payments to digital, Bangko Sentral ng Pilipinas, the countrys central bank, said.

Under President Ferdinand “Bongbong” Marcos Jr.‘s administration, the aim is to expedite the Philippines’ transition to a cash-lite society as outlined in the Philippine Development Plan for 2023-2028. However, with less than two years remaining until the deadline for this development plan, BSP Governor Eli Remolona Jr. has stated that the move toward digitalization is progressing slowly.

“Were on track, but maybe it will take a couple more years than we thought to get where we want to go,” Remolona told local news outlet OneNews.

In its 2024 report, the BSP found that digital retail payments represented 57.4% of the total transaction volume. The report also highlighted that 97.2% of these payments were made through government disbursement (G2X), making it the highest and most “cash-lite” of the three major payment types identified by regulators. Payments made by individuals (P2X) increased by 5.3% and accounted for 72.2% of all payments processed through digital channels. In contrast, payments made by businesses (B2X) constituted the smallest share, at 19.8%.

Given the sluggish rate, local officials acknowledged that the next phase would be more challenging. The BSP claims that the target to digitalize 60% to 70% of retail payments in 2028 may require expanding the user base, lowering transaction fees, and building stronger anti-fraud and cybersecurity systems.

“We worry a lot about cyber risks,” Remolona pointed out. “So even as we‘ve encouraged digitalization, we’re also trying to get the banks to also make sure that they defend themselves against cyber risks.”

Private organizations like the FinTech Alliance Philippines are adopting a proactive approach, aiming for 80% of Filipino adults to have digital transaction accounts and for 80% of retail payments to be digital by 2028.

Approaches of the Philippines to digital transformation

Since his first State of the Nation Address (SONA) in 2022, the Philippines President, Ferdinand “Bongbong” Marcos Jr., has shared a national digital transformation plan for his administration aimed at establishing the country as a global hub for digital assets. Marcos emphasized integrating emerging technologies such as quantum computing, artificial intelligence (AI), and blockchain into daily life and governance. In order to facilitate this transformation, he introduced keyregulations, including the E-Governance Act and the Internet Transactions Act.

In more recent news, the BSP revealed that it was discussing nationwide satellite internet connectivity with the Department of Information and Communications Technology (DICT) to enhance digital payments and financial education programs in the country, as well as developing a strategic central bank digital currency (CBDC) roadmap to facilitate the settlement of government bonds in the Philippines.

However, despite the several efforts to develop a digital transformation plan and become a leading digital hub in Southeast Asia, experts like Dominic Forrest, CTO of iProov, warn that the transition may face challenges, particularly in combating synthetic identity fraud. Figures reveal a 291% increase in synthetic identity document fraud in the first half of 2025 compared to the previous year. While overall digital fraud incidents have decreased due to improved law enforcement efforts.