Open finance in the Philippines

Open finance in the Philippines

Open finance is a concept that refers to the use of technology to provide greater access to financial data, products, and services. It is based on the idea that by making financial information more accessible, individuals and businesses can make more informed decisions and participate more fully in the financial system. Open finance is an emerging trend that has the potential to transform the financial industry and promote financial inclusion.


The traditional financial system has often been characterized by a lack of transparency, high fees, and limited access. Open finance aims to address these challenges by leveraging technology to provide individuals and businesses with greater access to financial data and services. This can include access to financial information such as bank account balances, credit scores, and transaction histories, as well as access to financial products and services such as loans, insurance, and investments. In the Philippines, open finance is an emerging trend that has the potential to transform the financial landscape and empower millions of Filipinos.

The Philippines has a large unbanked population, with around 70% of Filipinos lacking access to formal financial services. This is due to a variety of factors, including a lack of physical infrastructure, low levels of financial literacy, and the high cost of traditional banking services. Open finance has the potential to address these challenges and provide Filipinos with greater access to financial services.


One of the key drivers of open finance in the Philippines is the growing adoption of digital payments. The country has one of the highest rates of mobile phone penetration in the world, with over 80% of Filipinos owning a mobile device. This has enabled the rapid growth of digital payments, which are expected to reach $20 billion in value by 2025. This growth is being driven by several factors, including the increasing popularity of e-commerce, the rise of digital wallets, and the government’s efforts to promote financial inclusion.

Another important factor driving the growth of open finance in the Philippines is the emergence of fintech startups. These startups are using technology to provide innovative financial products and services that are more accessible and affordable than traditional banking services. For example, some fintech startups are using blockchain technology to create digital identity systems that can be used to verify the identity of individuals and businesses. This can help to reduce the cost and complexity of traditional KYC (Know Your Customer) processes, making it easier for more people to access financial services.

The government of the Philippines has also been taking steps to promote open finance and financial inclusion. In 2019, the Bangko Sentral ng Pilipinas (BSP) launched the National Retail Payment System (NRPS), which is designed to promote digital payments and make it easier for Filipinos to access financial services. The NRPS has already enabled the interoperability of over 50 payment systems, including mobile wallets, banks, and other financial institutions.

In addition, the BSP has been actively promoting the use of fintech to drive financial inclusion. In 2020, the BSP launched the Digital Payments Transformation Roadmap, which aims to increase the share of digital payments in total transactions from 10% to 50% by 2023. The roadmap includes initiatives to promote the use of QR codes for payments, expand the use of digital wallets, and support the growth of fintech startups.


Despite the potential benefits of open finance in the Philippines, there are also some challenges that need to be addressed. One of the main challenges is the need to ensure that the benefits of open finance are accessible to all Filipinos, including those in rural areas and those with low levels of digital literacy. This will require investments in physical infrastructure, such as internet connectivity and mobile phone coverage, as well as efforts to improve financial literacy and digital skills.

In summary, open finance is an emerging trend in the Philippines that has the potential to transform the financial landscape and promote financial inclusion. The country’s large unbanked population, high rates of mobile phone penetration, and growing fintech ecosystem provide a fertile ground for the development of innovative financial products and services. With the right investments and policies, open finance can help to empower millions of Filipinos and create a more inclusive and sustainable financial system.

Reynaldo C. Lugtu, Jr. is CEO of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is the chairman of the IT Governance Committee of FINEX Academy. He is fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University. The author may be e-mailed at