PERA advances open finance in Philippines 

The Bangko Sentral ng Pilipinas’ (BSP) push for personal equity and retirement accounts (PERA) is expected to promote the wider adoption of open finance in the Philippines, Tokyo-based think tank Asian Development Bank Institute (ADBI) said in a report by Manila Bulletin.

“The BSP remains committed to advancing open finance as a framework that both protects consumer data and fosters financial innovation,” ADBI said in “The APAC State of Open Banking and Open Finance Report” it published on July 2.

Open finance is an extension of open banking, which is defined by ADBI as an enabler for people “to share their payment account transaction data with trusted third-party providers (TPPs) and to instruct them to initiate payments from those accounts, to help them manage their finances better by, for example, accessing credit, or doing so more cheaply, or by enabling more flexible and cheaper payment services.”

Specifically, open finance “extends the data-sharing and action initiation principles of open banking to include a wider range of products and product providers in the ecosystem, for example, to include loans, savings, investments, pensions, and insurance, to facilitate product comparisons and initiate switching if a better deal has been identified,” ADBI said.

In the Philippines, ADBI quoted BSP Governor Eli M. Remolona Jr. as saying that the central bank “continues to pursue this vision of using technology and finance not only to connect markets, but also to ensure that every Juan and Maria would be part of the formal financial system.”

“In this light, we endeavor to create an environment that would enable our regulated entities and technology partners to leverage on advances in technology. One of the key policy enablers in this space is the BSP’s Open Finance Framework. Open finance offers an excellent opportunity to provide a seamless experience for customers, allowing banks and fintech firms to expand their services and remain relevant and responsive to increasing consumer demand,” Remolona said.

According to ADBI, “a key step in this direction is the BSP’s pilot use case—PERA—which highlights open finance’s potential to enhance financial inclusion and investment behavior,” referring to the Philippine government’s voluntary retirement savings program.

“BSP Deputy Governor Eduardo G. Bobier noted that as a pilot use case for BSP’s Open Finance initiative, PERA creates opportunities for seamlessly linking Filipinos’ bank accounts with financial service providers. This will help them make informed financial decisions more conveniently and efficiently,” the think tank added.

“In line with these efforts, the BSP has adjusted its implementation plans for a more feasible timeline, making steady progress on the ‘Project OFxPERA,’ a pilot that seeks to use open finance to streamline account opening and payment initiation of PERA. The initiative aims to boost PERA adoption, support capital market development, and improve Filipinos’ financial health and security, with a target go live in the first half of 2025,” it said.