The Bangko Sentral ng Pilipinas (BSP) will not issue regulations for crowdfunding platforms in the country yet, but will keep an eye on the industry, according to a report by Philippine News Agency (PNA).
"Since the crowdfunding industry is still nascent in the Philippines, it may be not yet be the time to issue regulations but we will continue to monitor the crowdfunding industry and take regulatory action when necessary," said BSP Governor Nestor A. Espenilla Jr.
Investopedia defines crowdfunding as the use of small amounts of capital from a group of individuals to finance a new business venture. This is commonly done through online.
In the Philippines, Espenilla said crowdfunding started for charitable purposes but later evolved for credit and investments.
Philippines' corporate regulator, the Securities and Exchange Commission (SEC), last October said it plans to draft rules and regulations on crowdfunding to protect the platforms from scammers, according to a report by Business World.
In particular, the SEC aims to regulate online crowdfunding that aims to raise capital for new business in exchange of equity or interest.
"If you're soliciting investments from Philippines, then you have to apply for a license for us. Otherwise, that's a scam. Well it's probably not a scam but at least you can be sued for operating without a licence," said SEC Chairperson Teresita J. Herbosa in the report.
Meanwhile, Espenilla said the central bank is monitoring the industry developments on crowdfunding and peer-to-peer lending in the country.
"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," Espenilla explained.