By Xander Dave Ceballos, September 23, 2023; Manila Bulletin

The Department of Finance (DOF) called on thrift banks to ramp up their digital transformation initiatives.

Finance Secretary Benjamin E. Diokno said the administration recognizes the role digital technologies play in unlocking economic potential, productivity, and competitiveness in the 21st century.

“Digitalization has upended the world of banking and finance, replacing traditional brick and mortar methods with digital payment systems, cloud computing, and blockchain technology,” Diokno said during the Chamber of Thrift Banks Annual Convention.

“These new ways of doing business offer superior speed, efficiency, security, and capacity at lower operational costs,” he added.

The finance chief cited a study where Artificial Intelligence or AI would contribute up to $92 billion to the Philippine economy by 2030.

On the other hand, Diokno added that blockchain technology has cost-effective financial solutions with security, accessibility, and transparency that could boost financial inclusion.

The speed of cloud computing, according to him, will continue to drive fintech’s growth through better data management and faster innovation of financial services at lower costs.

“These game-changing developments will be instrumental to securing a resilient financial system in the Philippines,” Diokno added.

The finance chief also asked for support from thrift banks to support the passing of Package 4 or the Passive Income and Financial Intermediaries Taxation Act into law.

The measure intends to fix the tax system to deepen capital and financial markets.

“With this reform, the Philippines sharpens its competitive edge in attracting capital and investments that are urgently needed to finance big-ticket infrastructure projects and create more and better jobs,” the finance chief said.

The bill was passed by the lower chamber last year and has been pending with the Senate Committee on Ways and Means since August 31, 2022.

Confident despite drop in approval ratings

Meanwhile, the economic team comprised of DOF, Department of Budget and Management, and National Economic and Development Authority assured that they are working hard despite a drop in approval ratings based on recent surveys.

“While approval and trust ratings may fluctuate given uncontrollable factors such as global or regional shocks, the economic team remains confident in President Ferdinand R. Marcos Jr., who continues to have one of the highest trust and approval ratings in the world,” the economic team said in a statement.

It further said that “surveys are primarily based on perceptions, not facts” and cited the country’s 5.3 percent gross domestic product (GDP) growth in the 1st semester of 2023, which was the highest among emerging markets in Singapore, Malaysia, Indonesia, Vietnam, and Thailand.

The economic team also added that the country is the third fastest-growing economy among Asian countries with available GDP data, following only India, which was first with 6.9 percent GDP growth for the first half of the year, and China at 5.5 percent.

“It is also worth noting that the Philippines’ economic growth performance appreciated in an environment where we continue to have elevated global economic and financial uncertainty,” it further stated.

The economic team made the statement following a recent “Pahayag” survey that showed that “economic headwinds” caused President Marcos’ approval rating to decreased from 62 percent in the second quarter to 55 percent in the third quarter.

A survey conducted by the PUBliCUS Asia Inc. Inc. also showed that the President’s trust rating fell down to 47 percent from 54 percent.