For a disaster-prone country, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said financial institutions, especially those in rural areas, should invest in satellite technology such as very small aperture terminals (VSATs) to be able to restore operations immediately after a calamity.
“With enhanced access to satellite broadband services, financial institutions can improve their disaster recovery plans as part of their resilience strategy. They will also be able to set up more access points, such as branch lite operations, ATMs, and cash agents in underserved areas,” said Diokno on Tuesday, March 22.
The BSP has supported Executive Order No. 127 which was issued in March 2021 to expand internet connectivity via satellite services which will improve internet connectivity in community areas particularly in remote areas.
The EO’s implementing rules and regulations (IRR) was also issued in September 2021 by the Department of Information and Communications to guide banks, fintech companies and other financial sector entities in the use of satellite technology for their operations.
Diokno used as example Cantilan Bank (CANBNK) in Mindanao that has put up a VSAT which allowed the rural bank to restore its online connectivity and ATM operations in Siargao City after Typhoon Odette last January. A VSAT is a small-sized ground station for transmitting or receiving data over a satellite communications network.
CANBNK Executive Vice President Tanya Hotchkiss said the VSAT connectivity helped the rural bank’s network redundancy measures and it served as contingency backup for its branches in Del Carmen and Dapa in Siargao City which were hit by recent typhoon.
Diokno said the BSP is “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.”
The BSP has proposed that as part of the EO’s IRR, banks or a consortium of banks in partnership with local financial service providers should be allowed to set up their own satellite broadband for digital or branchless operations.
The EO permits non-enfranchised but registered Internet Service Providers ISPs and value-added service providers to directly access satellite systems to build broadband facilities. There are 14 satellites that cover the Philippines.
Diokno has said that the EO promotes competition, more investments in the satellite broadband market and will bring down the cost of internet services in the country. Banks with their own satellites will have the capability to reach the unserved and underserved areas via digital financial services and improve remittances, bills payments and the opening of transaction accounts.
Internet connectivity is recognized as a critical enabler of financial and economic inclusion as financial transactions and services shift to online platforms.
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