The Bangko Sentral ng Pilipinas (BSP) issued a circular detailing the capital and other requirements of banks shifting to digital bank business models.
As Philippine banks move deeper into digital models, CFOs face a changing banking landscape—one where capital requirements, technology investment, risk management and competition for corporate deposits and lending increasingly intersect.
According to a report by the Philippine News Agency, Circular No. 1240 states that existing thrift banks (TBs), rural banks (RBs) and cooperative banks that the BSP determines are operating under a business model similar to that of a digital bank must have a minimum capital of PHP1 billion. In line with this, the central bank gave them six months from receipt of the notice to comply with the requirement.
Under the requirements, when a proposed acquisition is intended to transform a TB, RB, or cooperative bank into a technology-driven business model, the BSP requires a PHP1-billion minimum capital requirement at the time of application. Further, the bank must also comply with prudential standards applicable to digital banks.
The BSP may also impose additional requirements, including enhanced supervisory reporting; restrictions on certain activities or new digital products and services; and strengthened risk management and control systems.
According to the report, the circular also allows the BSP to issue additional digital bank licenses, including through the conversion of existing TBs, RBs, and cooperative banks, subject to the applicable licensing framework for digital banks.
For CFOs and finance leaders in the Philippines, the central bank’s new capital requirements are relevant not only as a banking-sector regulatory development, but also as a signal of how the country’s financial system is evolving toward more technology-driven and digitally distributed banking.
Why it matters to CFOs and finance leaders
1. More capital discipline around digital banking expansion
The PHP1-billion minimum capital requirement means banks moving toward digital-bank models will need to assess whether their capital base is sufficient to support their technology-led growth ambitions. For finance leaders, this puts capital allocation, funding requirements and return on invested capital at the centre of digital transformation decisions.
2. Digital transformation increasingly carries balance-sheet implications
The BSP is specifically looking at banks that use digital platforms and experience significant growth in loans or deposits. This means digitalisation is no longer simply an IT or customer-experience investment—it can materially change a bank’s risk profile, balance sheet and capital requirements. CFOs will need to connect technology investment decisions with capital adequacy, risk and financial performance.
3. Risk management becomes part of the investment case
The BSP can impose enhanced reporting, restrictions on digital products and stronger risk-management and control systems. For finance leaders, this raises questions around the cost of governance, cybersecurity, controls, compliance and operational resilience when scaling digital financial services.
4. Potentially greater competition for corporate banking customers
The BSP says a digital-bank license can allow institutions to reach customers beyond their traditional geographic areas. As more banks expand digitally, enterprises could see greater competition among financial institutions for deposits, lending relationships, payments and other corporate financial services. CFOs may therefore have more options when evaluating banking partners and financing arrangements.
5. A changing financing ecosystem for Philippine businesses
The BSP currently records seven digital banks, up from six earlier in 2026. Digital banks are also becoming more significant in lending and deposits: BSP data show digital-bank loan portfolios reached about PHP55.9 billion in June 2026, while digital-bank deposits reached about PHP171.5 billion.
The BSP said a digital banking license will allow banks to market their digital services to a wider customer base, including those outside their usual geographic area for business. Conversion to a digital bank license is subject to review.
Moreover, the BSP will consider the readiness to run a digital bank, robustness of governance and systems, value proposition, business model, and resource capabilities.
There are currently seven licensed digital banks in the country.
