Special report by Leira Mananzan, Correspondent
The Philippine financial landscape is undergoing a major transformation, driven by the rapid expansion of digital banks, e-wallets, and innovations within traditional banking systems.
As of 2023, digital payments accounted for an impressive 52.8% of total monthly transactions, far exceeding the Bangko Sentral ng Pilipinas (BSP)’s 50% target. This surge highlights the country’s significant strides in financial digitalization, with the BSP now aiming to increase formal financial system participation among Filipino adults to 70% by the end of 2025.
Digital banks lead the charge
The rise of digital banks in the Philippines is reshaping how Filipinos access and manage financial services. Six digital banks licensed by the BSP have seen remarkable growth, underscoring the growing trust in digital financial services.
Maya Bank continues its upward trajectory, with its user base hitting 5.4 million by early 2025. Maya’s deposits surged to PHP 39 billion, while its loan distribution reached PHP 68 billion by the end of 2024. The bank is also preparing for a landmark transaction, as KKR plans to sell its stake for an estimated US$2 billion, further cementing Maya’s position in the digital banking space.
GoTyme Bank is making waves with its expansive physical presence — 575 kiosks across malls, supermarkets, and offices. The bank is on track to grow its customer base from 5 million to 9 million by 2025, with deposits expected to reach PHP 24 billion. Additionally, GoTyme has integrated cutting-edge AI-driven analytics to strengthen financial crime prevention, enhancing both security and customer experience.
Tonik Digital Bank, a leading player in the sector, reported a staggering 133% year-on-year increase in new loan production in the first half of 2024, while the traditional banking sector saw just an 18% rise in consumer loans. With an annualized revenue run rate (ARR) of US$19 million, Tonik’s lending income surged by 78%, reflecting the growing demand for its digital-first loan products.
However, in 2024, Fitch raised concerns, warning that digital banks would face rising risks due to soaring credit costs and the challenges of lending to the unbanked. The global debt tracker noted that targeting these segments — who often have little or no credit history — poses a significant challenge for digital lenders seeking to expand their loan portfolios.
Today, despite these challenges, digital banks continue to make a significant impact. According to CEIC data, their total assets reached PHP 119.68 billion by December 2024, nearly doubling from PHP 59.40 billion in March 2023. This rapid expansion in digital banks is reshaping the country’s financial ecosystem and positioning digital banks as crucial players in the drive toward financial inclusion.
E-wallets transforming finance in the Philippines
E-wallets, such as GCash and Maya, have also become essential tools for financial inclusion in the Philippines, offering Filipinos easy access to financial services. These platforms provide a range of features beyond peer-to-peer payments, including bill payments, online shopping, and in-store purchases, making it easier for users, particularly in the rural areas, to manage their finances.
GCash, the country’s largest e-wallet, recently attracted a major investment as Mitsubishi Corp acquired a 50% stake in Mynt (GCash’s parent company), valuing it at US$5 billion. Meanwhile, Maya has continued to expand its financial services. Reports suggest that private equity firm KKR is exploring the sale of its stake in the company, which could value Maya at over US$2 billion. BSP data indicates that Maya has disbursed PHP 68 billion in loans, positioning itself as a key financial service provider.
To further expand accessibility, these e-wallets have developed cash-in and cash-out services, partnering with local stores and remittance centers, allowing even those without bank accounts to participate in the digital economy.
In addition to expanding accessibility, e-wallets are now also prioritizing security, integrating biometric authentication and multi-factor verification to protect user data and build trust. With millions of Filipinos adopting these digital tools, these security measures are vital to ensuring safe transactions. E-wallets are also addressing the need for financial support by offering microloans and credit services to underserved populations, including those without formal credit histories.
Furthermore, e-wallet platforms are empowering users with financial literacy resources, helping them make smarter decisions in the digital financial landscape. Through collaboration with traditional banks, these platforms now offer access to investment products and insurance, bridging the gap between digital and conventional financial services. Together, these innovations are transforming the Philippine financial ecosystem and enhancing financial access and education for millions.
Traditional banks adapting and innovating
In response to the digital revolution, traditional banks are embracing technology to remain competitive.
By adopting AI, blockchain, and enhanced mobile banking platforms, traditional lenders are improving customer service, streamlining processes, and expanding access to financial products.
The collaboration between digital banks, e-wallets, and traditional institutions is driving innovation and pushing the boundaries of what’s possible in financial services.
The Philippines is rapidly becoming a model for the digital transformation of finance in Southeast Asia, with the BSP leading the charge toward a more inclusive and tech-driven future.
As the financial ecosystem continues to evolve, 2025 is set to be a year of unprecedented growth, with digital-first financial solutions becoming the norm, transforming how Filipinos manage, invest, and spend their money.
The future of finance in the Philippines
With billions of pesos in investments, increased digital adoption, and regulatory backing, the Philippine financial sector is heading toward a digital-first future. While digital banks and e-wallets lead in innovation and accessibility, traditional banks are evolving to compete in the digital age.
Experts note that key challenges moving forward include bolstering cybersecurity to protect digital transactions, improving financial literacy to ensure responsible consumer participation, and maintaining strong regulatory oversight to balance innovation with financial stability.
BSP officials have time and again reiterated that the success of the country’s digital finance sector will depend on collaboration between financial institutions, regulators, and consumers in adapting to evolving technological advancements.