If more Pinoys go cashless, the national government could see its costs decrease by way of lower cash printing and coin minting costs, according to the Bangko Sentral ng Pilipinas (BSP). Know more:
INCHEON, South Korea—If more Pinoys go cashless, the national government could see its costs decrease by way of lower cash printing and coin minting costs, according to the Bangko Sentral ng Pilipinas .
“Let me first say that cash looks cheap because the central bank absorbs the cost. It costs P10 to make a P20 coin so quite a bit of subsidy of the central bank on the physical cash system. So in a sense, if you literally reduce the demand for cash, the central bank cost for minting will go down,” Medalla said.
The BSP governor said not all the solutions can be borne on the shoulders of the private sector and consumers. Efforts from the government are needed, especially in improving digital connectivity nationwide. “What the government can do is improve the signal. There’s nothing that the banks can do about the signal,” Medalla said. “Clearly, there are many things that government can do; it’s the signal and making sure that poor people, when they’re hit by disaster, have a fallback position.”Given this task, Medalla said, multilateral development banks like the Asian Development Bank should continue extending support for financial inclusion as well as infrastructure support.
Based on data from ADB’s Independent Evaluation Department, the Manila-based multilateral’s financial sector portfolio in the past 10 years accounted for 12 percent of ADB’s operations. Most, or 69 percent of these operations, were sovereign in nature.
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