Fintech group concerned over Middle East conflict

MANILA — The financial technology (fintech) sector in the Philippines has expressed concern over the rising tensions in the Middle East.

At the Digital Industry Caucus in Taguig, Fintech Alliance PH said the sector is both software and hardware, and any disruption in trade can also lead to negative effect for the sector.

Fintech relies heavily on chips, smartphones and other devices and disruption in shipping will impact the sector.

“The closure of that very important strait [of Hormuz] that will also impact on the price of oil, fuel commodities. That’s why we’re bracing ourselves for an eventual impact of those concerns,” said Lito Villanueva, founding chairman of Fintech Alliance PH and the chief innovation and inclusion officer of RCBC.

There is also a concern if the conflict expands to the digital space which can also directly effect fintech apps and programs.

Villanueva said, “Even the cyber warfare is critical. You are not seeing it, it’s invisible, but it’s impact is severe for any nation not ready for those cyberthreats.”

The group also said there may be an effect also on remittances which are usually transferred through fintech platforms. People will also tend to shift investments in digital assets, while there may also be increased use of fintech for donation purposes.

“It’s not just a vehicle to receive and send funds from war-torn areas, it’s also a way for them refer to safety in instances in which financial insitutions can be affected,” said Jen Bilango, Trustee of Fintech Alliance PH and Country Manager of Coins. PH

The Bangko Sentral ng Pilipinas said there is no effect for now, but it is monitoring the situation in the Middle East because tensions could affect oil prices which may then affect inflation.

“For now, I think wala naman. None so far because being dynamic is also a quality or attribute of fintech,” BSP Deputy Governor Chuchi Fonacier said when asked if the conflict is affecting the fintech or banking sector in general.

Fintech Alliance PH said geopolitical risk will be one of the many topics to be discussed at the upcoming 2025 Manila Tech Summit in August. The event’s theme is “Forging a New Global Order: Risks and Opportunities Redefined”.

Meanwhile, Fonacier was honored by Fintech Alliance PH with the BSP Governor Nestor Espinilla Jr Fintech Leadership Award for her contribution to advance the fintech sector. Other awardees include United Kingdom Ambassador Laure Beaufils, Australian Ambassador HK Yu, and Israeli Ambassador Ilan Fluss.

Source: ABS-CBN News