BSP monitoring crowdfunding developments

Bangko Sentral ng Pilipinas (BSP) Logo  (PNA Photo)

MANILA  – – The Bangko Sentral ng Pilipinas (BSP) is coordinating with other regulators overseas to apprise of the intricacies of crowdfunding whose platforms have tended to rise.

“Since the crowdfunding industry is still nascent in the Philippines it may be not yet be the time to issue regulations but we continue to monitor the crowdfunding 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 situation started for charitable purposes  and then later on evolved for credit and investments, but stressed that all these processes  pass through proper vetting process.

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

The central bank chief said the central bank was also “constantly surveying fintech activities of emerging market players.

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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 crowdfunding and peer-to-peer lending.

“While crowdfunding clearly has a potential to expand financial access for new businesses and MSMEs, there’s also 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 crowdfunding.