With two out of three Filipinos aged 10 years and above using the internet, 98.8% via mobile, the Philippines is well positioned to increase demand and growth for digital services.
Herminio Ozaeta Jr
Senior Partner
Romulo
Makati
Tel: +632 8555 9609
Email: Herminio.Ozaeta@Romulo.com
Yet despite a young and tech-savvy population, the country lags behind its Southeast Asian peers in digital infrastructure. In the meantime, recent regulatory updates are helping align laws with the nation’s evolving digital needs and aspirations.
The newly enacted Konektadong Pinoy Act modernises data transmission and connectivity policies by: updating decades-old laws that no longer reflect the current technological landscape; aiming to promote an open and competitive market; encourage new communication technologies and digital infrastructure investments; and improve the quality and reach of data transmission services.
Concurrently, developments from the Securities and Exchange Commission (SEC) and central bank, Bangko Sentral ng Pilipinas (BSP), are fostering fintech innovation in recognition of the country’s high adoption of digital financial solutions. Together, these regulatory updates lay the groundwork for greater digital inclusion and innovation.
Konektadong Pinoy Act
The new act requires all entities engaged in the provision of data transmission services as an economic activity – including public telcos, value-added service providers and satellite systems providers of operators – to register with the National Telecommunications Commission (NTC) as a data transmission industry participant (DTIP).
While the NTC has yet to issue the eligibility criteria for DTIPs, the act opens data transmission in the Philippines to foreign players.
DTIPs serving the domestic market must comply with a minimum capitalisation requirement of at least USD200,000 under the Foreign Investments Act, as amended, if foreign equity exceeds 40%.
Currently, data transmission services are not on the Foreign Investment Negative List, and not classified as public utilities under the Public Service Act, as amended. However, they may be considered critical infrastructure, since telecommunications, which encompasses data transmission services, is classified as such.
Accordingly, 100% foreign equity may be allowed if reciprocal rights exist for Filipino nationals in the applicant’s home country; otherwise, it is capped at 50%.
Operations and access
Jesse Eleazer Tantoco
Senior Associate
Romulo
Makati
Tel: +632 8555 9669
Email: Jesse.Tantoco@Romulo.com
DTIP registration confers significant new privileges, removing a longstanding entry barrier. DTIPs may now establish and operate their own networks or facilities without a legislative franchise, certificate of public convenience and necessity, or partnering with a franchised entity. Likewise, they may access spectrum resources and operate international gateway facilities, core networks or backbone networks with NTC approval.
These changes amend the Radio Control Act of 1931, as amended, a law that predated the rise of wireless communications and for long restricted radio station operations in the Philippines to Filipino-controlled franchised entities.
The act also introduced an open access policy requiring entities owning, leasing or operating digital infrastructure and services included in the government’s Access List to allow another entity access when necessary, offering data transmission services competitively.
This measure aims to promote competition, facilitate market entry and expansion, and encourage the efficient use of digital infrastructure.
Satellite technology
Aligned with the Department of Information and Communications Technology’s (DICT) policy to encourage innovation and competition, registered DTIPs may deploy satellite technology and use associated spectrum without leasing capacity from public telcos, provided they secure NTC authorisation.
Direct access to satellite systems no longer requires prior authorisation from the DICT for broadband networks – or NTC approval for broadcast or non-broadband networks – provided the terms of access to any international fixed or mobile satellite system are submitted to the relevant agency.
The act mandates a Spectrum Management Policy Framework, a timely update given the growing demand for spectrum, a non-exhaustible but shared resource prone to interference.
The framework will establish comprehensive guidelines for spectrum management, including pricing, allocation and assignment. Entities seeking spectrum assignment or joint use must now notify the Philippine Competition Commission (PCC) and obtain a no-objection notice.
Fintech updates
Fintech is another driver of the Philippines’ digital transformation, fuelled by strong customer adoption and regulatory support. In 2024, digital payments accounted for 57.4% of total monthly retail payment volume and 59% of transaction value.
Digital transactions represented 72% of payments made by persons and 97.2% of payments made by the government, with merchant payments emerging as the leading use at 66.4% of total digital payment volume.
These trends signal a decisive shift towards digital financial systems, with key regulators remaining proactive to ensure the sector keeps pace with developing demands.
Virtual assets
Victoria Rose Velasco
Associate
Romulo
Makati
Tel: +632 8555 9612
Email: Victoria.Velasco@Romulo.com
In response to the growing adoption of cryptocurrencies, the Securities and Exchange Commission recently issued Memorandum Circular No. 4, Series of 2025 (Rules on Crypto Asset Service Providers), recognising that crypto assets may be constituted as investment products when offered to the public.
Entities dealing with crypto assets offered as securities – such as public offerings, operating a trading venue, or intermediation activities – must register as a crypto asset service provider (CASP) and comply with applicable requirements and operational guidelines outlined in Memorandum Circular No. 5, Series of 2025 (Guidelines on the Operations of Crypto Asset Service Providers).
Requirements include minimum capitalisation of PHP100 million (USD1.75 million) in cash or property (excluding crypto assets) and maintenance of a physical office in the Philippines appropriately staffed during regular business hours.
The SEC Rules on Crypto Asset Service Providers specifically exclude from their coverage crypto assets offered for purposes other than as financial products, as well as those issued or offered under the regulatory purview of other Philippine agencies, such as the central bank (BSP), which oversees virtual asset service provider (VASP) activities.
VASPs facilitate the transfer or exchange of virtual assets for fiat currencies or other virtual assets, excluding those solely for payment of goods or services provided by the issuer.
Unlike CASPs, which are overseen by the SEC for offering crypto assets, a specific type of virtual asset, as investment products, VASPs are supervised by the BSP for facilitating virtual asset transfers or exchanges for payment or financial purposes.
The BSP’s three-year moratorium on new VASP licences expired on 1 September 2025. Until then, new VASP licences were granted only to existing BSP-supervised financial institutions seeking to expand into offering VASP services, provided they demonstrated strong risk management systems. This approach aimed to promote innovation while maintaining sound risk oversight.
Digital banking
While the BSP has lifted the moratorium on new digital bank licences, effective since 1 January 2025, only six banks have been licensed to date, despite a cap of 10. Digital banks operate fully online, offering financial products and services processed end-to-end through digital platforms or channels, without physical branches or units.
The limited number of licensed digital banks may be attributed to stringent requirements: applicants must meet a high capitalisation requirement of PHP1 billion, as well as demonstrate unique value proposition or innovative business models not offered by existing players; significant potential to reach a broader clientele; and readiness to deploy and sustainably grow their digital solutions in the Philippines.
Meanwhile, electronic money issuers (EMIs) – comprising banks, non-bank financial institutions (EMI-NBFIs) or other BSP-registered entities authorised to issue, transfer and redeem electronic money – have seen notable developments since the moratorium for EMI-NBFIs was lifted on 16 December 2024.
Major EMI-NBFIs are expanding to lending, investing and virtual asset services through partnerships with licensed entities or by obtaining additional licences, while new EMI-NBFIs are offerings services not typically provided by major EMIs, such as lower-cost cross-border money services.
Outlook
While Philippine regulatory frameworks for digital services are still maturing, there are opportunities and challenges that require prudent management by industry participants seeking to fully benefit from them.
Recent regulations are updating the frameworks to meet the country’s current and evolving digital needs, supported by policies promoting open markets and competition, such as liberalisation of foreign equity restrictions. Coupled with the country’s high digital adoption, these factors position the Philippines as a natural growth market for digital services.
New entrants and established players must also navigate changing requirements from multiple agencies, underscoring the importance of active engagement with regulators to ensure compliance and help shape the policy landscape.
The Philippines’ digital sector presents significant growth potential but requires careful navigation of a regulatory environment that is still evolving. Businesses that adopt proactive compliance and maintain open engagement with regulators will be best positioned to capture investment opportunities in this expanding market.
ROMULO MABANTA BUENAVENTURA SAYOC & DE LOS ANGELES LAW
21st Floor, AIA Tower 8767 Paseo de Roxas
Makati City 1226, Philippines
Tel: +632 8555 9555/8848 0114
www.Romulo.com