Central bank Deputy Governor Nestor Espenilla Jr. said there are now 49 rural banks offering mobile banking from none before 2005.
These eight million users use the electronic money (e-money) services of major telecommunications companies Smart Communications and Globe Telecom, which offer Smart Money and G-Cash, respectively, BSP said.
These allow mobile subscribers, particularly those without bank accounts, to deposit, transfer, and withdraw money from one e-money account to another in the telecom company's business centers nationwide.
Espenilla noted that the Philippines has been recognized by international organizations for its microfinance initiatives and is considered as the leading pioneer in mobile banking solutions for the poor.
Some banks even lowered interest rates on microfinance loans for clients who use text-a-payment platform by 50 basis points on monthly rates, Espenilla added.
"Technology extends outreach of microfinance and banking services to a large number of bankable but un-banked especially those in rural and hard to reach areas at lower costs and higher efficiency," he said.
He explained that the mobile phone industry in the Philippines serves all income groups especially low income groups and more than 75 percent of the population have mobile phones.
Electronic transactions, which involve the payment of purchased goods and services, could also be used for remittances from Filipinos abroad, Espenilla noted.
“The amount of e-money transactions is already huge, and we expect it to grow further," the BSP official added.
The BSP said it has ordered firms offering e-money services to register with the central bank as an electronic money issuer (EMI).
These could include banks, non-bank financial institutions, and money transfer agents. Those qualified as EMI include stock corporations with a minimum paid-up capital of P100 million. E-money is also not considered a bank deposit and is not covered by the deposit insurance provided by the Philippine Deposit Insurance Corp. (PDIC).
The guidelines also limit the maximum amount that can be loaded to any e-money instrument to P100,000 a month.