BSP offers rural banks free three-year core banking system

By Francis Allan L. Angelo

The Bangko Sentral ng Pilipinas said Sept. 1, 2026, that eligible rural banks will receive a free three-year subscription to a cloud-based core banking system, along with assistance to accelerate their digital transformation.

For depositors and borrowers in rural communities, the program could improve the reliability, security and accessibility of essential banking services while reducing the technology costs faced by smaller lenders.

The intervention covers a large community-banking network with uneven digital reach. At the end of March 2026, rural and cooperative banks had 370 head offices and 3,112 offices, but only 65 institutions in the group had BSP-approved electronic banking facilities, central bank data showed.

The assistance falls under the Digitalization Technical Assistance component of the BSP’s Rural Bank Strengthening Program, or RBSP.

The BSP said the core banking system would streamline operations, strengthen cybersecurity and operational resilience, improve customer service and help rural banks comply more effectively with regulations.

BSP Governor Eli M. Remolona, Jr. said: “Rural banks are a vital partner of the BSP in driving growth, especially in rural communities. Through this digitalization program, we aim to help rural banks become stronger, more competitive, and better equipped to serve their customers.”

The core banking system will be delivered as Software-as-a-Service and operated by an external provider.

The assistance will also support banks as they prepare to adopt the cloud-based system.

Target beneficiaries are rural banks that have demonstrated a commitment to strengthening their operations under the RBSP, comply with applicable minimum capital requirements and have no existing subscription to a SaaS-based core banking system when they apply.

Applicants must have submitted an application or letter of intent for an eligible RBSP track during the program’s availability period from Sept. 21, 2022, to Sept. 21, 2025.

The eligible tracks are merger or consolidation, acquisition or third-party investment, upgrade of banking license and the Capital Build-Up Program.

Under BSP Circular No. 1151, rural banks operating only a head office or up to five branches must have at least PHP 50 million in capital.

Rural banks with six to 10 branches must maintain at least PHP 120 million, while those with more than 10 branches must have at least PHP 200 million.

The BSP issued the program guidelines on Aug. 12, 2026, covering qualifications, documentary requirements, application and evaluation procedures, and other rules.

Applications are scheduled to open one month after the guidelines were issued.

The BSP may hold briefing sessions to help rural banks assess their readiness and prepare their applications, with details to be announced through its official communication channels.

The Digitalization Technical Assistance is part of the broader RBSP technical assistance program approved by the Monetary Board in January 2024.

The broader program has three components: digitalization, financial advisory and capacity building.

The RBSP has four key elements: a strengthened capital base, five time-bound tracks, incentives and capacity-building interventions, and the review and enhancement of existing regulations.

The initiatives are anchored on Republic Act No. 7353, or the Rural Banks Act of 1992, which authorizes the BSP to provide technical assistance to rural banks.

The complete guidelines are available in BSP Memorandum No. M-2026-042. The central bank listed 8811-1277 local 3025 as its contact number for further information.