The Philippines is in the pilot phase. The Bangko Sentral ng Pilipinas announced in 2022 that it decided to pilot a wholesale CBDC. The pilot CBDC (referred to as Project CBDCPh) was pursued as part of an effort to “promote the stability of the country’s payment system.” Therefore, it was limited to financial institutions and specifically designed to test large-value financial transactions operating on a 24/7 basis. Bangko Sentral ng Pilipinas governor Eli Remolona Jr. told journalists in 2024 that a wholesale CBDC will likely be issued by 2026, but the central bank does not see a reason to issue a retail CBDC.

CBDC History and Development

In a 2022 speech, Bangko Sentral ng Pilipinas governor Benjamin E. Diokno shared cautious optimism about the pilot project. Although he looked forward to how a CBDC could address payment efficiency, he noted that CBDCs do not address the root causes of financial exclusion. Furthermore, he explained that while a wholesale CBDC should be legally permissible, a retail CBDC may require legislation as it goes beyond what is currently in the central bank’s charter. After the Project CBDCPh concluded later in 2022, governor Diokno reportedly said that existing digital payment systems turned out to be better options.

In 2023, the Bankgo Sentral ng Pilipinas announced a new CBDC pilot (referred to as Project Agila) that would run on Hyperledger Fabric. Again, this CBDC pilot was meant to address payments efficiency and stability. Participating financial institutions include BDO Unibank, Inc., China Banking Corp., Land Bank of the Philippines, Rizal Commercial Banking Corporation, Union Bank of the Philippines, Maya Philippines, Inc., Citibank N. A. Manila, China Bank Savings, Wealth Development Bank Corporation, and SeaBank Philippines, Inc. Participants will use the CBDC in a closed experimental environment. This work was also aided by the International Monetary Fund and the Bank for International Settlements.

In 2024, Bangko Sentral ng Pilipinas governor Eli Remolona Jr. offered two updates. First, he said that the central bank would not use blockchain technology because it didn’t go well when other central banks tried it. Second, he said that the central bank would not pursue a retail CBDC. Instead, its focus is limited to a wholesale CBDC. Bangko Sentral ng Pilipinas deputy governor Mamerto Tangonan later added that the plan was to complete a wholesale CBDC pilot by the end of 2024. The pilot will involve six financial institutions: BDO Unibank Inc., China Banking Corp., Land Bank of the Philippines, Rizal Commercial Banking Corporation, Union Bank of the Philippines, and Maya Philippines Inc.

Later in 2024, Bangko Sentral ng Pilipinas deputy governor Mamerto Tangonan said, “We’re already about to conclude the [Project Agila] proof of concept” and that the central bank is set to issue a wholesale CBDC by 2029.

Human Rights and Civil Liberties Concerns

The Philippines earned a 58 out of 100 in Freedom House’s 2023 Freedom in the World report. When it comes to the issuance or use of a CBDC, the most relevant issues are the restrictions on opposing voices and the persistence of government corruption. A CBDC could worsen both issues.

Amnesty International reported that journalists are harassed and independent news sites are blocked. Unfortunately, a CBDC could be used as another tool in this effort. Across the world, governments have often turned to freezing and seizing the money of activists, political rivals, and protestors to undermine the opposition. A CBDC would make such initiatives easier by allowing governments to take direct control of each citizen’s finances.

“Government corruption and impunity remain serious problems, and the courts,” according to Freedom House, “and other anticorruption institutions have struggled to hold powerful politicians and their associates to account.” The existence of pervasive corruption is a major concern with CBDCs because it calls into question any promises that might be made by the government to limit surveillance, control, or other risks of CBDCs. Furthermore, the existence of corruption calls into question whether CBDC policies might be designed to exert political favoritism through subsidies, price controls, or other targeted restrictions.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.