Reports from local media have shed further light on the Bangko Sentral ng Pilipinas (BSP)'s initiatives to explore a wholesale central bank digital currency (wCBDC), with an official disclosing additional details about the project. Mamerto Tangonan, the central bank's deputy governor for payments and monetary management, revealed during a press conference on March 6 that the wCBDC pilot project, dubbed Project Agila, is slated for completion by the year's end. Tangonan characterized the pilot initiative as a "learning exercise," emphasizing its role in facilitating broader financial inclusion and accessibility to investment instruments.
Participating in the wCBDC pilot are six domestic banks, including BDO Unibank, Bank of China, Land Bank of the Philippines, Rizal Commercial Bank, Union Bank of the Philippines, and Banco Maya Philippines, alongside the Bangko Sentral ng Pilipinas. The pilot project leverages wCBDC technology to facilitate interbank fund transfers. Tangonan underscored the broader objectives of the initiative, stating a desire to explore the potential utilization of wCBDC for more sophisticated financial services, such as securities settlement, in addition to promoting democratized access to investment opportunities.
Central bank governor Eli Remolona previously articulated the BSP's cautious approach towards exploring wCBDCs, citing concerns regarding bank disintermediation and related issues associated with the potential introduction of retail CBDCs. Remolona clarified that the envisioned wCBDC would not operate on a blockchain infrastructure. The BSP initially signaled its interest in exploring CBDC issuance back in 2020, with the Monetary Board expressing positive sentiments towards wCBDC following an initial assessment, subsequently announcing plans to commence pilot testing in 2022 under the CBDCPh project, which has now evolved into Project Agila.
The Philippines has previously engaged in pilot studies concerning retail CBDCs, collaborating with entities like the Digital Dollar Project, Western Union, and BDO Unibank in 2023 to explore the feasibility of a retail CBDC for remittance purposes. Initial findings from these studies highlighted potential cost reductions, enhanced transparency, and increased competition in the remittance landscape. However, challenges persist, particularly concerning transaction speed improvements, as a significant portion of remittances arrive in the Philippines after standard business hours, necessitating further optimization efforts in this domain.
