EDITORIAL | The Rise of Digital Banking in the Philippines: A Game-Changer or Just Hype?

Digital banking is transforming Filipino finance, but will its wave of innovation truly lift all boats, or leave rural communities adrift? The division this emergence brings seems to be unfolding differently than expected.

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In this archipelago of more than 7,000 islands, promising natural beauty and cultural richness, a silent financial revolution is well underway in the Philippines. The seismic shift brought about by the rise of digital banking promises to dramatically redefine how the Filipinos manage their finances. However, as this tsunami of innovation spreads throughout the country, we all have to wonder: Will this increase in digital banking really be the change we are all about, or will it fade just as soon as it appears?  

The COVID-19 pandemic became a catalyst as it lit a match between the innovations in digital banking and whether it would be embraced. Lockdown and social distancing measures made it impossible to follow normal banking procedures; thus, Filipinos resorted to a sharply increased adoption of digital wallets and online banking services. Reporting is said to have increased by more than 150% in the course of 2020, where PayMaya and GCash topped the lot. Financial services become instantly accessible in the palm of your hand, enabling millions of individuals to deposit, transfer, and even invest without ever having to set foot inside a bank.  

However, as cities boom in the light of this digital era, rural communities largely sit on the wrong end of the digital divide. They are left out by a huge chunk of potential customers because of poor internet connectivity and limited penetration of smartphones. That is why, in digital banking, those with resources and skills are already heaping benefits on top of pre-existing imbalances. If large portions of the public are not reached, then this promise of financial inclusion threatens to become hollow rhetoric.  

Even so, digital banking can definitely shift the Philippines to a great extent at this critical juncture. Will we be brave enough to take up this opportunity to bargain with the challenges brought about by the digital future? This spate might not be hype but the beginning of a much brighter and non-exclusive financial future for every Filipino with the right approaches and commitment. The digital banking revolution may, therefore, be the way that opens itself to a more representative economy, assuring every Filipino a chance to share in the full participation of society.