BSP chief expects more banks to cut transfer fees after BPI, RCBC

Bangko Sentral ng Pilipinas Governor (BSP) Eli Remolona Jr. expects a broader wave of lenders to slash or eliminate fund transfer costs, following aggressive fee waivers by some of the country’s largest banking institutions ahead of a strict weekend regulatory deadline. Speaking at a BSP book launch on Friday, Remolona said he anticipates more financial institutions will adjust their pricing structures within days to comply with a new mandate. The regulatory push has already seen industry heavyweights move first. Bank of the Philippine Islands (BPI) permanently waived fees for electronic fund transfers, while Rizal Commercial Banking Corp. (RCBC) eliminated costs for its InstaPay transactions and reduced fees for PESONet transfers. Remolona framed the impending industry-wide adjustments as a critical step toward maximizing the efficiency of the domestic financial ecosystem, invoking the economic concept of network externalities to explain the regulatory pressure on remaining lenders. The value of a payment system increases as more participants join, Remolona said, comparing the infrastructure to a telephone network. He noted that a phone is of little use if it can only connect to one person, whereas its utility grows exponentially as the network expands. To unlock this value across the entire banking sector, Remolona added that entry and transaction costs should be kept low, or ideally, reduced to zero. The countdown comes as BSP Circular No. 1238, which updates the National Retail Payment System framework, takes effect on Saturday, July 4. Under the new rules, Philippine banks must close the pricing gap between interbank and intrabank fund transfers. The policy mandates that fees charged for transactions between different financial institutions, known as off-us transfers, must closely align with those charged for transfers within the same bank or e-wallet. BSP Deputy Governor Mamerto Tangonan clarified that the policy effectively caps outward transaction charges. Lenders cannot charge more than their internal transfer fee plus the baseline switch fee. Furthermore, the directive requires all financial institutions to tie their electronic transaction fees directly to actual operational expenses, preventing arbitrary premiums on external transfers. By enforcing cost-aligned pricing and encouraging smaller institutions to follow the momentum set by the big banks, the regulator aims to accelerate digital transaction adoption. The BSP continues to urge the broader banking sector to keep electronic payments significantly cheaper than traditional over-the-counter alternatives to transition the cash-dominant economy into a digitized financial hub.