MANILA, Philippines – For nearly five years, the Bangko Sentral ng Pilipinas (BSP) has kept a lid on increases in digital transfer fees. Now that the freeze has been lifted, will fees go up, or can regulators and the government push them lower?

The BSP, through Memorandum No. M-2026-025 and Circular No. 1238 issued on June 17, has cleared the way for payment service providers to adjust fees for InstaPay and PESONet transactions under a new pricing framework.

For consumers, these are the fees typically charged when sending money between bank accounts or e-wallets. Currently, institutions charge anywhere from P5 to upwards of P50, according to a report by the BSP.

The ban was first implemented back in 2021, during the pandemic-era acceleration of digital payments. At the time, the BSP wanted to sustain the shift to cashless transactions and prevent banks and other payment players from raising transfer charges just as more Filipinos were relying on online channels.

Since then, the BSP has been consistent in its message of trying to limit or eliminate fees for small transfers. In late 2023, the BSP upheld the ban, reiterating that banks were not allowed to raise InstaPay and PESONet fees and that it would only lift the freeze after the payments industry operationalized zero fees for small electronic payments.

So why the change now?

According to the BSP, the goal is not to pave the way for higher consumer charges, but to move from a blanket freeze to a more targeted pricing regime with lower fees.

“The lifting of the moratorium is grounded in the implementation of zero fees for small merchant payments, and the establishment of a pricing structure for person-to-person electronic fund transfers under the Circular which aims to reduce fees for this segment and provide parameters for responsible pricing and market conduct,” the BSP said.

Under the new rules, banks and other payment service providers must adopt a policy for setting electronic payment fees. These fees must be justified using what the BSP called a “reasonable and fair market-based pricing mechanism,” and should not arise from non-competitive agreements. The BSP also said pricing should reflect the actual cost of conducting the electronic transfer. The new framework also requires small merchants to receive digital payments without being charged fees.

The BSP has long pushed for the elimination of fees for small transactions. As far back as 2023, then-BSP Governor Felipe Medalla argued that small transactions should “be free of charge so that the poor can also use digital payments.” (READ: Fees no more? Bangko Sentral wants to remove fees on small transactions)

Now, Finance Secretary Frederick Go is similarly pushing to drop digital transfer fees to as low as P2 to P5 per transaction.

“Digital payment should be fast, secure, convenient, and affordable. We’ve been talking to them (the BSP) about this. We want to level the playing field,” Go said, as reported by Inquirer.net.

How do you bring fees down?

But bringing fees down is not as simple as ordering banks and e-wallets to stop charging. Customer transfer fees cover several layers of cost: the switch or network fee paid to process the transaction, clearing and settlement costs, cybersecurity, authentication tools such as one-time passwords, fraud monitoring, customer support, compliance, and the institution’s own digital infrastructure.

Banks have argued that these costs are larger than the basic InstaPay switch fee of around P3. In 2024, Bank of the Philippine Islands (BPI) president and chief executive officer Jose Teodoro “TG” Limcaoco, then also head of the Bankers Association of the Philippines, said BPI’s own study found that each interbank transfer cost the lender about P22. He said BDO came up with a similar number.

Limcaoco had proposed a conditional cut in banks’ reserve requirement ratio (RRR), or the share of deposits banks must keep with the BSP, in exchange for zero interbank transfer fees. His argument was that banks would be more willing to absorb transfer costs if the BSP allowed them to deploy more of their reserves into lending.

“The same way the central bank incents [incentivizes] the thrift banks to lend to the lower segments by giving them a lower reserve requirement, why can’t you incent[ivize] any bank that does free transfers by cutting reserve requirement?” he said in 2024 as reported by GMA News.

The BSP, under Medalla, did explicitly float RRR cuts to make free small-value transfers possible. In 2023, Medalla said the BSP was ready to work with banks and payment system operators on a cost-sharing setup that would exclude small transactions from fees. Speaking at the annual reception for the banking community, the former BSP governor said, “I promise you, the central bank will be in a greater hurry to cut reserve requirements so you can afford to give those fees.”

Current BSP Governor Eli Remolona Jr., however, has been cool to using the RRR as a targeted incentive for lower transfer fees, saying that he would “prefer that the reserve requirement not be used for the purpose.”

Finance Secretary Go, meanwhile, has acknowledged that the goal is not necessarily to eliminate all fees. Instead, he has pushed for a competitive nudge.

“You just need one of the big players to drop. Then people have to compete. Then we drop the convenience fees. That will add pressure on agencies that continue to collect high convenience fees,” he said.

The government has already used Land Bank of the Philippines to set a benchmark. In May 2026, Landbank cut its InstaPay transfer fee for individuals from P15 to P8, while allowing customers one free InstaPay transfer per day for transactions worth P1,000 and below. – Rappler.com

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