President's Message
Atty. Benedicta Du-Baladad Message from the President:

Benedicta Du-Baladad


To FINEX members and friends,

PRESIDENT’S REPORT
August 2017 Issue

Last July 19, Department of National Defense (DND) Undersecretary Cardozo Luna shared with us the security policies of the Duterte Administration amidst Marawi crisis and the Martial Law in Mindanao. Unfortunately, DND Secretary Delfin Lorenzana Jr. was not able to grace the event due to an emergency meeting that he has to attend.

Read more

2017 Year-Round Corporate Sponsors

PARTNERS :

DIAMOND :

GOLD :

Affiliations
Ads
Virtual currency – boon and bane
Print PDF
By REYNALDO C. LUGTUBy REYNALDO C. LUGTU

MANILA TIMES(FINEX FILES)
September 1, 2017

Virtual currency – boon and bane

FINEX Files is a rotating column of members of the Financial Executives Institute of the Philippines appearing every Friday in Manila Times, business column section.

“Virtual currency-based payments and remittance transactions have been monitored at $5 million to $6 million per month”. This is the surprising fact shared the Bangko Sentral ng Pilipinas (BSP) during the event organized the Financial Executives Institute of the Philippines (Finex).

What’s even more surprising is how this seemingly esoteric topic gained widespread support and attendance from Finex members and non-members alike from across various industries. And why? Because virtual currency (VC) has been growing rapidly for the past several years such that Bitcoin, a type of VC, had an incredible 500-fold increase in price over the past five years, climbing above $2,900 in June 2017; and Asia is driving this growth.

With VC’s growing popularity comes with it opportunities as well as risks to businesses and consumers. That’s why the BSP released a set of rules in February this year, a pioneering move in Asia, that “seeks to balance the interests of promoting technological innovations with the potential to improve the level of inclusion and efficiency in the financial system, and to proactively address emerging risks to the system arising out of these new technologies.”

So, what exactly is VC? There have been subtle differences in definitions but the BSP defines it as “any type of digital unit that is used as a medium of exchange or a form of digitally stored value created by agreement within the community of VC users. VCs are not issued nor guaranteed by any jurisdiction and do not have legal tender status.”

According to BSP Deputy Governor Chuchi Fonacier, who delivered the keynote during the event, VCs has the potential to accelerate the delivery of financial services such as payments and remittance, and lower the cost of transactions, which is consistent with the BSP’s broader financial-inclusion agenda.

The International Monetary Fund (IMF) in unison said that “VCs offer many potential benefits, including greater speed and efficiency in making payments and transfer--particularly across borders--and ultimately promoting financial inclusion.”

These “across borders” benefits are more pronounced in Philippines where remittances from overseas Filipino workers (OFWs) contribute more than $26 billion to the economy, prompting VC startups such as Coins, a blockchain-based platform that facilitates remittances, bill payments and mobile airtime top-ups.

While the BSP takes a positive stance on VCs, still many Central Banks in Asia see VCs with a hostile stance. The Monetary Authority of Singapore (MAS), for example, clarified in early August its regulatory position on the offer of digital tokens in Singapore such that “the offer or issue of digital tokens in Singapore will be regulated by MAS if the digital tokens constitute products regulated under the Securities and Futures Act”. For Malaysia, Bank Negara Malaysia does not regulate the operations of bitcoin; and the central bank has advised the public to be cautious of the risks associated with the use of VC.

There is reason to be cautious with the use of VCs, as there is potential to use this for money laundering schemes. The IMF already issued the standard cautions about how VCs might be used for money laundering, terrorism and other nefarious purposes.

Just this July, a Russian man was indicted by a U.S. jury on charges of laundering more than $4 billion through a Bitcoin exchange, Reuters reported. Reportedly, “he used the exchange to launder money for criminals, and ties him to the demise of another popular Bitcoin exchange, Mt. Gox, which was shut down in February 2014 after 850,000 of its bitcoin—then worth about $450 million—went missing”.

VCs are here to stay and will develop and progress further. We just hope that in the long-run, the benefit outweighs the risks.

The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of FINEX. The author may be emailed at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

The author is the President of The Engage Philippines, digital marketing and customer engagement solutions company. an information and communications technology firm. He is the Chairman of the ICT Committee of the Financial Executives Institute of the Philippines (FINEX). He teaches strategic management in the MBA Program of De La Salle University. He is also an Adjunct Faculty of the Asian Institute of Management

FEATURED ARTICLES
PH-OGP, The Philippine Open Government Partnership. Part 2
Santiago F. Dumlao Jr.By Santiago F. Dumlao Jr.

BUSINESS MIRROR (Free Enterprise)
September 22, 2017

PH-OGP, The Philippine Open Government Partnership. Part 2

Simply, we wish to bring to greater awareness this ongoing program that promises long-lasting positive influence to good governance in government, with the strong engagement of the private sector. Let the PH-OGP brochure say it in a capsule:

Read more...
Energy and infrastructure
Flor G. TarrielaBy Flor G. Tarriela

Business World (FINEX Folio)
September 22, 2017

Energy and infrastructure

At the successful 2 nd  Annual Philippines Energy and Infrastructure Forum held recently sponsored by PNB Capital, BPI Capital and PJS Law, topics included the Golden Age of Infrastructure, the new role of the Public-Private Partnership Center (PPPC), optimal financing strategies for energy and infrastructure projects, legal implications of the competition law on energy and infrastructure sectors, and the energy mix in the future.

Read more...
Outdoor advertising for MSMEs
J. Albert GamboaBy J. Albert Gamboa

MANILA TIMES(FINEX Files)
September 22, 2017

Outdoor advertising for MSMEs

Peace talks have collapsed between the Philippine government and the National Democratic Front-Communist Party of the Philippines-New People’s Army (NDF-CPP- NPA), with the Reds blaming President Rodrigo Duterte for the breakdown of negotiations.

Read more...
PH-OGP, The Philippine Open Government Partnership. Part 1.
Santiago F. Dumlao Jr.By Santiago F. Dumlao Jr.

BUSINESS MIRROR (Free Enterprise)
September 20, 2017

PH-OGP, The Philippine Open Government Partnership. Part 1.

Simply, we wish to bring to greater awareness this ongoing program that promises long-lasting positive influence to good governance in government, with the strong engagement of the private sector. Let the PH-OGP brochure say it in a capsule:

Read more...
Overstepping authority
J. Albert GamboaBy J. Albert Gamboa

MANILA BULLETIN(Business Option)
September 19, 2017

Overstepping authority

Business owners in major Philippine cities are in a quandary about the way their local government units (LGUs) are implementing President Rodrigo R. Duterte's Executive Order 26 that regulates smoking in enclosed public places and conveyances.

Read more...
Breaking barriers to competitiveness
J. Albert GamboaBy J. Albert Gamboa

BUSINESS WORLD(FINEX Folio)
September 15, 2017

Breaking barriers to competitiveness

The Financial Executives Institute of the Philippines (FINEX) will hold its 49th Annual Conference at the Fairmont Hotel in Makati City on Oct.13. Organized by the FINEX Week Committee, its theme is “Breaking Barriers to Competitiveness in the ASEAN Financial Sector” with the following rationale:

Read more...
Partners