The Bangko Sentral ng Pilipinas (BSP) and the Cooperative Development Authority (CDA) recently signed a Memorandum of Agreement (MOA) on the collaborative oversight and supervision of cooperatives that are electronic money issuers and operators of payment systems, including those that deploy ATMs.
The CDA is mandated by law to promote the viability and growth of cooperatives as instruments of equity, social justice, and sustainable economic development.
BSP Governor Eli M. Remolona, Jr. (third from left) and CDA Chairman and Undersecretary Joseph B. Encabo (second from left) during the signing of the Memorandum of Agreement on the Cooperative Oversight Arrangement last October 18, 2023. Joining them as witnesses are BSP Deputy Governor Mamerto E. Tangonan (rightmost) and CDA Board Member and Assistant Secretary Myrla B. Paradillo (leftmost).
BSP Governor Eli M. Remolona, Jr. and CDA Chairman Joseph B. Encabo inked the MOA at the BSP Head Office in Manila amid the celebration of “National Cooperative Month” this October.
The MOA sets out the arrangement between the BSP and CDA for the concurrent oversight and regulatory approach as well as the exchange of information to facilitate the discharge of their respective mandates.
“This collaboration is crucial in developing a comprehensive regulatory framework that considers the unique challenges and opportunities authorities face,” said BSP Governor Eli M. Remolona, Jr.
“This collaboration will result in regulations that are proportionate, relevant, and future-proof. The approach will also avoid regulatory arbitrage and enhance the transparency and accountability of the cooperative sector,” he added.
Avoiding gaps, duplications, and inconsistencies
The BSP is mandated under the National Payment Systems (NPS) Act to exercise oversight over the NPS, which includes the aforesaid covered cooperatives.
The cooperative oversight initiative provides coordination between the BSP and government agencies to avoid gaps, inefficiencies, duplication, and inconsistencies in regulations.
The onboarding of cooperatives in NPS supports the BSP’s Digital Payments Transformation Roadmap and the National Strategy for Financial Inclusion (NSFI), which serves as a blueprint to achieve the vision of driving financial inclusion toward inclusive growth and financial resilience.
Building on the principles-based approach of the original strategy launched in 2015, the updated NSFI contains specific interventions, outcome measures, and targets to guide all stakeholders working together to accelerate financial inclusion in the country.
According to the latest data from the BSP, financial cooperatives are currently present in 212 or 13% of unbanked municipalities.