Use of Satellite Technology to Boost Financial Sector, Supported by BSP

The Bangko Sentral ng Pilipinas (BSP) expressed its support for the issuance of Executive Order (EO) No. 127 — signed in March 2021 — to advance financial inclusion and improve the disaster resiliency of banks located in remote areas. EO No. 127 is geared to expand internet connectivity through the use of satellite technology, which entities in the financial sector may integrate into their operations.

“With enhanced access to satellite broadband services, financial institutions can improve their disaster recovery plans as part of their resilience strategy,” explained BSP Governor Benjamin Diokno. “They will also be able to set up more access points, such as branch lite operations, ATMs, and cash agents in underserved areas.”

The BSP highlighted the benefits of satellite technology by pointing out its use following the devastation caused by Typhoon Odette in December as Cantilan Bank (CANBNK) in Mindanao set up a VSAT enabling it to restore online connectivity as well as ATM operations in Siargao City, which was among the hardest-hit areas of the calamity.

“By supplementing our network redundancy measures with VSAT connectivity, the bank effectively provided a contingency measure for branches operating in disaster-stricken areas,” elaborated CANBNK Executive Vice President Tanya Hotchkiss. Diokno added that the central bank remains “optimistic that with EO No. 127 and other market-enhancing policy reforms being introduced, satellite broadband services will become more accessible and affordable, which will further boost digital financial inclusion in the country.”

A proposal has likewise been forwarded by the BSP  for the EO’s implementing rules and regulations (IRR), which seeks to allow banks in partnership with local financial service providers to install their own satellite broadband for branchless operations. This will hopefully boost the capacity of banks to reach the unserved and underserved areas across the country while improving remittances, bills payments, and the opening of transaction accounts through digital financial services.

According to the Trade Department, the EO has also spurred a promising relationship with Elon Musk’s SpaceX after it was signed by President Rodrigo Duterte. Philippine officials in Washington met with the firm’s officers late last year to discuss the potential of Starlink’s low-orbit satellite technology in the country.

Sources: ABS CBN, Manila Bulletin