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An official from the Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, shared additional details about the institution’s plans to explore wholesale Central Bank Digital Currency (wCBDC), according to local reports.
Mamerto Tangonan, the Deputy Governor for the Payments and Currency Management Sector at BSP, disclosed during a press conference on March 6 that the wCBDC pilot project, known as Project Agila, is expected to conclude by the end of this year. Describing the pilot initiative as a “learning exercise,” Tangonan expressed the vision of democratizing access to securities and similar investment instruments in the Philippines. He stated:
“We envision a Philippines where access to securities and similar investment instruments can be democratized, meaning they could be purchased for smaller issue sizes and much much lower fees so that any Juan or Maria cannot only dream but actually own securities.”
Six domestic banks, namely BDO Unibank, China Banking Corp., Land Bank of the Philippines, Rizal Commercial Banking Corporation, Union Bank of the Philippines, and Maya Philippines, are participating in the pilot alongside BSP. The project employs wCBDC for interbank fund transfers.
Tangonan also shared aspirations for exploring the potential use of wholesale CBDC for higher-value services like securities settlement, emphasizing the need for a versatile and impactful digital currency system.
In February, BSP Governor Eli Remolona had clarified that the central bank was solely considering a wCBDC, addressing concerns related to bank disintermediation and associated challenges linked to the issuance of a retail CBDC. He specified that the CBDC would not operate on a blockchain.
The Philippines had initially expressed interest in issuing a CBDC in 2020, and the BSP Monetary Board outlined positive initial assessments for a wCBDC. The pilot tests, known as Project CBDCPh, were planned to commence in 2022, with the official launch of the pilot project announced in April 2022.
In 2023, the Philippines participated in a pilot study with the Digital Dollar Project, Western Union, and BDO Unibank, focusing on retail CBDC for remittances. The study revealed potential cost reductions, increased transparency, and enhanced competition, although challenges related to transaction speed were acknowledged, particularly for remittances arriving after working hours.
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