Philippines Central Bank to lift moratorium on digital bank licenses in 2025

The Bangko Sentral ng Pilipinas (BSP) has announced that it will lift the moratorium on new digital banking licenses starting January 1, 2025, allowing four more digital banks to operate in the country. The move comes as the BSP seeks to tap the potential of digital banks to enhance the Philippine financial system while ensuring that risks are effectively managed. Since the introduction of the Digital Banking Framework in December 2020, six digital banks have already begun operations in the Philippines, and the upcoming licenses will accommodate both new banks and conversions.

BSP Governor Eli Remolona Jr. emphasised that the central bank will closely monitor the digital banking sector as it evolves, particularly assessing the impact of new players on the banking system. The application process for these new licenses will be stringent, focusing on applicants’ value propositions, business models, and resource capabilities. Applicants must meet standard licensing criteria, including transparency of ownership, suitable shareholder composition, and strong governance and risk management frameworks.

The BSP is particularly interested in applicants who can bring innovative products and services that differentiate them from existing market players. The central bank expects these new digital banks to reach broader clientele, especially those in untapped or underserved market segments. The decision to allow more digital banks aligns with the BSP’s goals of promoting financial system stability, advancing financial inclusion, and driving digital transformation.

This development follows the BSP’s previous decision to cap digital bank licenses at six and temporarily close the application window in August 2021. The central bank has also been involved in approving a stablecoin pilot programme as part of its broader efforts to enhance the digital landscape within a regulated framework.