In an ambitious bid to make the Philippines as Asian financial technology (fintech) capital, the chairman of the House Committee on Ways and Means on Monday filed House Bill (HB) 7864, or the Blockchain Technology Development Act.
Albay Rep. Joey Sarte Salceda said his bill aims to ensure that blockchain technology is legally recognized and regulated in the country.
“Blockchain is actually more than just cryptocurrency. At the heart of blockchain is technology that makes the storage and updating of records more secure. It also lowers transaction costs and is very difficult if not impossible to defraud,” Salceda said.
With blockchain, Salceda said he expects transaction costs for money transfers and other financial services to be cheaper for Filipinos.
“Blockchain is also very secure and the records are highly portable. That makes it a perfect tool for programs such as the National ID system, better records management in Philhealth and better distribution of social benefits,” Salceda added.
Blockchain, or distributed ledger technology, is a method of passing information from one terminal to another in a fully automated and secure manner. One party to a transaction initiates the process by creating a block.
Salceda said this block is verified by thousands, or even millions of computers distributed around the net. The verified block is added to a chain, which is stored across the net, creating not just a unique record, but a unique record with a unique history.
He added the way that blockchain distributes transaction histories across the net is a reason why it is used for cryptocurrencies such as Bitcoin.
“Blockchain can be applied across so many areas in both the public and private sectors. I want us to grab the opportunity to be a hub for this development,” said the lawmaker.
The measure identifies the permitted and restricted uses of blockchain technology while establishing the Bangko Sentral ng Pilipinas (BSP) as the policy-making and regulatory agency for the use of blockchain in the financial sector.
It also encourages the use of blockchain in the broader economy and the use of blockchain technology in human development programs.
The measure also releases blockchain use from overregulation by local governments; and explores the use of blockchain in the National ID system.
Earlier, Salceda said that he hopes to lead the charge in Congress for policies that will make the country a hub for financial technology firms fleeing Hong Kong due to stringent regulations, and Singapore and Shanghai due to oversaturation.
“We have a large untapped market of consumers of financial products. And we have an untapped labor force that could be trained to become skilled workers in this field. The Philippines is definitely in the game,” Salceda said.
Salceda has also a $20 billion in annual foreign direct investment as the country’s goal for rapid national development.
The lawmaker said the efforts to make the country a fintech capital are part of his goal to meet this national target.