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EO 127 allows banks to set up own satellites

BANGKO Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno is proposing to allow banks to set up their own satellite broadband for its digital or branchless operations.

On March 10, President Rodrigo Duterte issued Executive Order (EO) 127, allowing banks, or a consortium of banks to operate their own satellite broadband for their operations to the benefit their consumers.

He cited as example Indonesia’s Bank Rakyat which put up its own banking satellite in 2016. “The bank deployed 51,000 antennas or teleports to connect their regional branches and ATMs nationwide. We hope that many of our local financial service providers can replicate the Bank Rakyat experience.”

Diokno said the EO will apply not only to banks or a consortium of banks but also banks in conjunction with other local financial services provider. The BSP was able to secure this EO as chair of the inter-agency Financial Inclusion Steering Committee (FISC).

The IRR was supposed to have been released last April 10 but the Philippine Space Agency (PhilSa) requested for an extension in submitting its own comments to the Department of Information and Communications Technology (DICT).

The new 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 currently 14 satellites that cover the Philippines. Diokno said 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 also be able to reach the unserved and underserved areas via digital financial services and improve remittances, bills payments and the opening of transaction accounts, added Diokno.

“By leveraging on liberalized access to satellite technology, banks and other financial service providers in remote areas may now be able put up more access points such as ATMs, cash agents, and branch-lite operations. They can also offer digitalized payment transaction services accessible via the internet,” he said.

The BSP governor said that satellite technology is ideal for areas where it is more expensive to roll out wired or mobile networks, such as islands like the Philippines. This supports the government’s goal of connecting the whole country in the shortest possible time.