The next phase of payment modernisation in the Philippines is shifting from moving existing users onto faster rails to widening access to those rails. Transaction volumes through InstaPay and PESONet continue to rise, but user growth has not kept pace. Combined transaction value increased 42% year-on-year to PHP 24.7 trillion (approx. $400.4 billion) in 2025, yet the Bangko Sentral ng Pilipinas (BSP)’s 2025 Consumer Finance and Inclusion Survey found only half of Filipino adults owned a formal financial account. Provincial businesses, smaller financial institutions (FIs) and parts of corporate supply chains remain dependent on cash, cheques and manual reconciliation, requiring transaction banks to keep investing in digital processing while giving smaller institutions access to infrastructure otherwise uneconomical to build independently. BDO Unibank is responding by broadening its transaction infrastructure. Having spent several years linking branches and cash-handling infrastructure with application programming interfaces (APIs) and digital channels for corporate clients, the bank is extending clearing, processing and control capabilities to smaller FIs and wallet providers, letting them join automated payment networks without building the infrastructure themselves. From channel digitalisation to end-to-end processing BDO Unibank’s cash management strategy initially combined branches, cash deposit machines and remote cheque scanning with digital payment and reporting tools. The newer emphasis is on what happens behind those channels. The bank has invested in an ISO 20022-native payments platform, SwiftNet FileAct, digitised cheque clearing and a new core banking system for more real-time payment processing. “Most banks, when they think digital, they only think about the digital channel,” said Carlo Nazareno, Head of Transaction Banking Group — Cash Management Services at BDO Unibank. “Digital is end-to-end, because you can’t have a digital front end and a manual back office,” he added. BDO Unibank enhanced account-based payment and collection capabilities and enabled corporate use of PESONet PayGate for government payments. Nazareno added that the bank was the first to extend PayGate for corporate payments and was among four pioneering institutions involved in industry efforts to develop the multilateral Direct Debit scheme, with related functionality currently accessible to selected users as part of a phased implementation. It also increased its cash management and trade finance API functions from eight to fourteen. Yet capability does not automatically translate into usage. Digitally active corporate customers and platform utilisation fell from 98% in 2024 to 74% in 2025, while active API users declined from 62 to 22, a decline Nazareno linked to heightened fraud concerns. “What we really need is new users and not just volumes,” Nazareno said. That distinction matters as the BSP prepares the next phase of its Digital Payments Transformation Roadmap. Nazareno estimated about 45% of transaction banking activity remains physical because of broadband gaps, cash-dependent commerce and lingering fraud concerns. BaaS as a tool to expand inclusion infrastructure BDO Unibank is formalising its BaaS proposition by giving partner institutions outsourced access to InstaPay, PESONet, cheque clearing, reconciliation and fraud-monitoring processes, letting them deliver stronger cash management services to their own corporate customers. Nazareno estimated about 150 of the Philippines’ roughly 450 rural banks participate in automated clearing houses. BDO Unibank currently supports an estimated 30 to 40 FIs and has at least 50 banks in its pipeline, though onboarding is managed cautiously to satisfy controls and due diligence standards. Nazareno described BDO Unibank as a “bridge” for institutions not yet ready to invest heavily in infrastructure, credential controls, people and processes. The Palawan Group of Companies illustrates this beyond BDO Unibank’s own corporate clients. Through its BaaS model, the bank provides Palawan Pawnshop and Palawan Pay with InstaPay settlement sponsorship, clearing access and transaction processing, enabling more than 22 million Palawan Pay users to transfer funds instantly to participating banks and e-wallets without building the underlying settlement infrastructure. A different competitive emphasis While a domestic competitor has pursued a more product-intensive strategy, rapidly deploying cash-acceptance and cheque-scanning devices and building a larger API catalogue, BDO has differentiated itself through an integrated model combining physical reach, clearing access, back-office processing, regulatory controls and after-sales support. As interest-rate cuts narrowed spreads and banks reduced digital transfer fees, BDO Unibank has relied on transaction volumes, corporate services and account relationships to support digital infrastructure. In the Philippines, technology alone is not a key differentiator, and Nazareno argued that customers continue to value responsive support when a problem emerges. “There are people I can call and rely on any time of the day, any day of the week,” he said. In 2026, BDO Unibank plans to expand treasury-transformation reviews and automation workshops, extend cash management support to clients in Hong Kong and Singapore, deepen SME acquisition and formalise BaaS for more FIs. The larger test is whether these investments can convert rising transaction throughput into broader digital participation. In a market where physical cash remains deeply embedded, success may depend less on digitising faster than on making digital participation workable for institutions and customers unable to complete the transition alone. Contact details: BDO Unibank https://www.bdo.com.ph
