BSP won’t issue regulations yet, but readying for rise in crowd-funding activity

August 22, 2017 - 2:55 PM
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Internet user on a laptop, in Reuters file photo.

MANILA – The Bangko Sentral ng Pilipinas (BSP) is coordinating with other regulators overseas to be fully prepared for the intricacies of crowd-funding, as platforms for which have become more popular.

“Since the crowd-funding industry is still nascent in the Philippines it may be not yet be the time to issue regulations but we continue to monitor the crowd-funding industry and we’ll take regulatory action when the time comes, when necessary,” BSP Governor Nestor A. Espenilla Jr. told reporters recently.

Espenilla said the platform had originally been conceived for charitable purposes, but later evolved into a venue for sourcing credit and investments. He stressed that all these processes pass through proper vetting process.

Crowdfunding refers to the activity of raising money from people through a website for a project or a small business. Its platforms continue to increase, since there are also a rising number of people who have funds and who want to partner with those who have expertise.

The central bank chief said the BSP was also “constantly surveying fin-tech activities of emerging market players.”

Fintech or financial technology is an innovation aimed at helping start-ups meet their possible funding source through the use of technology related to new applications, processes and business models, among others.

Espenilla said the BSP is also monitoring industry developments on crowd-funding and peer-to-peer lending.

“While crowd-funding clearly has a potential to expand financial access for new businesses and MSMEs, there’s also a heightened risk of investor and consumer abuse,” he said.

The central bank chief said the BSP had shared with the Financial Stability Forum (FSF), a group composed of finance ministers, central bankers and international financial institutions, its research on crowd-funding.