A LAWMAKER on Friday pushed for the passage of several measures aimed to modernize the country’s banking sector.
During a virtual hearing of the House Banks and Financial Intermediaries Committee, House Ways and Means Chair Jose Maria Clemente S. Salceda pushed for the passage of House Bill No. 5193 or the Virtual Banking Act, which will help the entry of digital banking players and provide a framework that would encourage traditional banks to participate.
“Physical banking services have declined in accessibility, and during a pandemic, operating them poses some risk to consumers and employees. Banks also have a tendency to provision excessively in times of crisis, as opposed to expanding services in sectors in heightened need of capital,” he said.
Mr. Salceda said HB 7660 or the proposed Financial Technology Industry Act would also help and encourage the development of new financial technologies (fintech) in the country. The measure creates a Financial Technology Office in the Bangko Sentral ng Pilipinas (BSP) to institutionalize the fintech industry and formulate a Financial Technology Industry Roadmap.
The lawmaker is also pushing for the passage of HB 7864 or the Blockchain Technology Development Act to help encourage the study and application of distributed ledger technology, “which could make services cheaper and more efficient.”
Mr. Salceda likewise called for the passage of HB 7863 or the Fair and Inclusive Credit Reporting Act, which encourages credit transmission to underserved sectors by encouraging the use of “big data” to improve credit risk assessment and relationship management.
Mr. Salceda said the Congress would be able to create “a policy environment that incentivizes and compels traditional banks to innovate” by passing his proposed measures.
These reforms constitute a “creative disruption of a seemingly unchanging sector,” he added.
Industry associations like the Bankers Association of the Philippines and the Chamber of Thrift Banks expressed support for the bills. The BSP, Securities and Exchange Commission, and the Department of Information and Communication Technology also expressed support for various provisions of the bills. The Credit Information Corp. has also expressed support for HB 7863.
Committee chair Junie E. Cua said a technical working group which he will chair will be created to study the bills.
BSP Monetary Board member Bruce J. Tolentino, meanwhile, said the modernization of the banking sector won’t be possible without improving the country’s digital infrastructure. — K.A.T. Atienza