The growth of digital payments in the Philippines is projected to rebound to double-digit expansion this year as reduced transaction costs encourage greater consumer adoption of online channels.
A senior central bank official said the share of digital payments in total retail transactions rose by only a single-digit pace in 2024, ending three consecutive years of double-digit growth.
The central bank now anticipates renewed momentum after banks moved to waive or cut digital transfer fees to comply with new regulatory rules.
In 2024, digital payments accounted for 57.4% of the country’s total monthly retail transaction volume, up from 52.8% in 2023, and 59% of total value, up from 55.3%.
The single-digit increase in volume share marked the first such slowdown since 2020, when digital payments rose to 20.1% from 14% in 2019.
The central bank aims for digital payments to represent 60% to 70% of total retail payment volume by 2028 under the national development plan.
Officials noted the country remains far from the upper target but expressed hope that lower fees could accelerate adoption ahead of schedule.
Several major financial institutions reported a surge in transactions and new customer onboarding within a week of reducing InstaPay and PESONet transfer fees.
The key question is whether the increase can be sustained, according to the official, who said the trend will be closely monitored.
A recent circular directed banks, e-wallets, and payment providers to lower digital fund transfer costs based on reasonable, fair, and market-based pricing.
Under the rules, fees for person-to-person transfers between institutions must not materially differ from same-bank transfers, with switch cost as the only allowable difference.
Switch cost refers to the fee charged by a clearing operator to process interbank transactions, typically around 1.50 pesos.
Most major banks and e-wallets handling the bulk of digital volume have complied, with regulators focusing on large players for broader public impact while expecting smaller banks to follow.
