After a nearly three-year moratorium on new applications for digital bank licences in the Philippines, the Bangko Sentral ng Pilipinas (BSP), the country’s central bank, on Thursday has re-opened applications for fully digital banks. 

In the Philippines, a digital bank is defined as a bank with no physical bank branches. There are currently six fully digital banks in the country.

Beginning January 1 2025, up to four new digital bank licences, the BSP says, could be granted, meaning there could be a maximum of 10 digital banks allowed to operate in the country at any one time. 

“With this limit, the BSP can closely monitor developments in the digital banking industry, obtain a broader perspective as these banks mature further in their operations,” notes Eli Remolona, the BSP’s governor, “as well as assess the impact of the entry of new players on the banking system.”

The four new licences, he adds, can be granted to either completely new players or to existing banks wishing to convert their existing licences.

Once licensed the new banks will join existing digital banks GOTyme, Maya Bank, Overseas Filipino Bank (OFBank), Tonik Bank, UNObank and UnionDigital of the Union Bank of the Philippines.

Applicants will be subject to, the BSP notes, “a rigorous licensing process that will look into their value proposition, business models and resources capabilities.

“This is in addition to compliance with the standard licensing criteria, which encompasses the assessment of the transparency of banks’ ownership and control structure, suitability of shareholders, fitness and propriety of directors and senior management, adequacy of capital, as well as banks’ strategic and operating plan, including an appropriate system of corporate governance and risk management.” 

The stringent application process, Remolona explains, is meant to ensure that any new player will “bring something new to the table. We want to see unique product and service offerings that are different from that offered by the existing market players. These offerings should have significant potential to reach broader clientele, particularly the untapped or underserved market segments.”

In addition to unique value propositions, applicants should be able, the BSP points out, to display sufficient capabilities and readiness to deploy their digital solutions and to sustainably grow their business within the Philippine setting. 

Applicants are also urged to demonstrate how they will help the country achieve its policy objectives in relation to its Digital Banking Framework, which focuses on promoting the wider adoption and use of digital financial services in the country, while expanding their reach into the unserved and underserved segments of society.