Philippine central bank official discloses information on wCBDC pilot project

A representative of the Bangko Sentral ng Pilipinas (BSP) has disclosed further information regarding the central bank’s wholesale central bank digital currency (wCBDC) exploration, as reported by local media.

BSP’s deputy governor for payments and currency management sector, Mamerto Tangonan, revealed during a press briefing on March 6 that the wCBDC pilot initiative, dubbed Project Agila, is slated for completion by year-end. Tangonan described the pilot as a “learning exercise,” envisioning broader access to investment instruments for individuals with smaller capital and reduced fees.

Six domestic banks, including BDO Unibank, China Banking Corp., Land Bank of the Philippines, Rizal Commercial Banking Corporation, Union Bank of the Philippines, and Maya Philippines, are participating in the pilot alongside BSP. The project employs wCBDC for interbank fund transfers, exploring potential applications in securities settlement.

BSP governor Eli Remolona previously emphasized the central bank’s focus on wCBDC, citing concerns over bank disintermediation and associated issues with retail CBDC issuance. He clarified that the wCBDC would not operate on a blockchain.

The Philippines first expressed interest in CBDC issuance in 2020, with BSP’s Monetary Board initiating pilot tests in 2022, initially known as Project CBDCPh. A formal pilot launch was announced in April 2022.

In 2023, the Philippines participated in a pilot study involving the Digital Dollar Project, Western Union, and BDO Unibank, exploring retail CBDC for remittance purposes. While the proposed CBDC showed potential for cost reduction and enhanced transparency, transaction speed improvement remains a challenge, particularly for remittances received after working hours.