Palace Urges Banks to Cut Transfer Fees, Boost Financial Inclusion

MANILA, Philippines — Malacañang on Monday urged other banks and financial institutions to reduce or completely eliminate transfer fees, just like state-run Land Bank of the Philippines (Landbank), to boost government efforts to remove barriers to financial access and make banking more inclusive. “We hope all banks will follow what Landbank has started to help our fellow Filipinos,” Palace press officer Claire Castro said. Castro credited Finance Secretary Frederick Go, who chairs the Landbank board of directors, for initiating the reduction in transfer fees and eliminating convenience charges for certain government transactions. Go had pushed for slashing the P10 to P50 interbank transaction fee to just P2 to P5 per transaction, saying that “digital payment should be fast, secure, convenient and affordable. We’ve been talking to them (Bangko Sentral ng Pilipinas) about this. We want to level the playing field.” While he has no direct authority to regulate fees imposed by banks and digital payment providers—a function exercised by the Bangko Sentral ng Pilipinas (BSP)—Go directed Landbank to start lowering its rates. In May, the state-run lender trimmed its InstaPay transfer fees for person-to-person transactions from P15 to P8 and also introduced one free InstaPay transfer per day for transactions totaling P1,000 and below. Landbank later implemented zero fees for person-to-government transactions made through QRPh-enabled channels, including the Link.BizPortal platform, physical QR standees at participating agencies, and government websites utilizing the bank’s Link.BizPortal. Covered transactions include payments to select national government agencies, government-owned and -controlled corporations, local government units, water districts, and state universities and colleges. Malacañang’s appeal came after BSP Governor Eli Remolona Jr. said that more banks were expected to waive or lower transfer fees for transactions with other financial institutions following its directive. The central bank issued BSP Circular No. 1238, which took effect on July 4, encouraging financial institutions to adopt “reasonable and fair market-based” pricing for person-to-person electronic fund transfers. Among those that complied were e-wallets GCash and Maya, which both reduced their InstaPay transfer fees from P15 to P10. Private lenders Ayala-led Bank of the Philippine Islands (BPI) and Yuchengco-led Rizal Commercial Banking Corp. (RCBC), on the other hand, waived their transfer fees through their digital channels. Effective July 1, customers using the BPI mobile app, online banking platform, VYBE, BanKo and BizKo no longer need to pay fees for transfers to other banks and e-wallets via InstaPay and PesoNet. BPI previously charged P10 per InstaPay transaction and P50 for PesoNet transfers made through its mobile app. Meanwhile, clients using the RCBC Pulz app can transfer funds to other local banks via InstaPay for free starting on July 4. The waiver covers the first 30 InstaPay transactions each month, with a minimum transfer amount of P100 per transaction. Banks and other financial institutions have increasingly reduced online transfer fees and introduced digital incentives to encourage greater app usage and strengthen competition with rival lenders and financial technology firms in the country’s fast-expanding digital payments market. Data from the BSP showed that the customer base of the digital bank industry expanded quickly to 25 million depositors as of March, up 67 percent from the previous year. This underscored its deepening reach into segments of the retail market long underserved by brick-and-mortar lenders. Deposits in digital banks as of March also reached P153 billion, 50 percent higher than the previous year. These funds were spread across nearly 38 million accounts, a 58-percent increase year-on-year.