Philippines freezes new payment-system approvals for 12 months and unveils $34.4B AI plan

Philippines tightens payment rails and doubles down on AI infrastructure

Early September delivered a striking one-two punch from the Philippines: a regulatory clamp on new payment-system operators and a national plan to spend $34.4 billion on AI infrastructure. Together these moves tighten short-term controls on digital payments and lay a long-term foundation to host AI workloads, reskill workers, and link the country more closely into ASEAN’s digital economy.

Short-term: a 12-month pause on new payment-system operator registrations

On September 7, the Bangko Sentral ng Pilipinas (BSP) released a draft circular proposing a 12-month suspension on accepting and processing applications for payment-system operator (OPS) registration. OPS refers to entities that operate payment systems and must register with the BSP.

“The acceptance and processing of applications for OPS registration shall be suspended for a period of twelve (12) months from the effectivity of this Circular. The suspension is being imposed to facilitate the BSP’s holistic review of the OPS taxonomy and licensing framework, including the attendant risk management and regulatory considerations.”

The draft clarifies procedural mechanics. Applications filed before the suspension will be accepted and reviewed, but the BSP will not issue approvals or denials until the suspension ends. Companies cannot start activities that require OPS registration unless the BSP specifically authorizes them. BSP-supervised institutions that provide merchant-acquisition services must enter into direct arrangements with regulated virtual asset service providers (VASPs) that are subject to enhanced due diligence, monitoring, and transaction and settlement limits. The draft treats regulated VASPs as high-risk businesses similar to money service providers and certain gaming operators, and it invites stakeholder comments ahead of final publication and effectivity. If approved, the circular would take effect 15 days after publication.

Why this matters now: fintechs, payment service providers (PSPs), and crypto firms face a near-term “pause and harden” scenario. Expect fewer new OPS approvals for a year and stricter expectations for bank/VASP relationships and AML/KYC controls.

Long-term: PAIIM 2026-2033, a $34.4 billion roadmap for AI infrastructure

On September 8, the Department of Information and Communications Technology (DICT) presented the Philippines AI+ Infrastructure Masterplan (PAIIM) 2026-2033 at Crowne Plaza Manila Galleria. DICT’s National ICT Planning, Policy and Standards Bureau Officer-in-Charge Gemma Baysic framed the goal plainly: “to build, host, power, and support the AI ecosystem of the future.”

Total plan size: $34.4 billion, with $13.5 billion public (39%) and $21 billion private (61%).
Jobs and GDP: government projections include over 500, 000 AI‑related jobs plus roughly 175, 000 jobs from AI infrastructure projects by 2033, and an estimated uplift to the economy such that AI-driven productivity gains could raise the Philippines’ GDP contribution to 10-12% (these are plan projections).
Reskilling target: 1.3 million IT‑BPM (Information Technology and Business Process Management) workers to be upskilled for AI services.
Data-center capacity: grow from a baseline of about 50 megawatts (MW) today to 1.5 gigawatts (GW) by 2033 (1.5 GW = 1, 500 MW), with an initial phase aiming for ~400 MW by 2030.
GPU estimate: the plan references roughly 152, 000 GPUs for planned AI projects (the document does not specify GPU class or breakdown between training and inference workloads, power and cooling needs will vary by GPU model).
Energy strategy: natural gas to meet immediate needs, a target of 40% renewables (solar and geothermal) for AI infrastructure by 2033, and a DOE probe into nuclear as a long‑term option under Republic Act 12305 (the PhilAtom Act).
Geographic anchors: Clark‑Bataan as primary anchor, Batangas‑Aurora as a gateway, Subic and CALABARZON as supporting hubs, and regional nodes planned for Cebu, Iloilo, Davao, and Cagayan de Oro.

The plan explicitly assumes major private investment (the $21 billion figure). Mobilizing that capital will depend on bankable project pipelines, power purchase agreements, land readiness, incentives, and regulatory clarity, issues the plan highlights but does not fully resolve in the short term.

Regional layer: DEFA and ASEAN digital integration

Trade Secretary Ma. Cristina Roque used September 7 events in Makati to promote the ASEAN Digital Economy Framework Agreement (DEFA), a region-wide architecture for e-commerce, digital trade, payments interoperability, and cybersecurity. Roque described DEFA as “the biggest deal actually in ASEAN for trade.” Negotiations were reported to have concluded in May, and proponents point to studies suggesting ASEAN’s digital economy could reach up to $2 trillion by 2030. If implemented, DEFA would reduce cross-border friction and make the Philippines’ AI and data-center ambitions more attractive to regional customers.

Budget signals and connectivity targets

The Department of Budget and Management (DBM) proposed a PHP 53.1 billion national ICT and digitalization budget for 2027 (reported roughly as ~$846-847 million in various briefings). The allocation includes the Free Public Internet Access Program (PHP 5 billion) with a target of 38, 829 active public internet access points nationwide, a near 69% increase from the 2026 goal. It also boosts the eGovernment budget (PHP 3.23 billion) and increases funding for the National Government Data Center Infrastructure (PHP 950 million).

President Ferdinand “Bongbong” Marcos Jr.: “By expanding reliable connectivity, we bring essential government services, education, healthcare, and economic opportunities closer, regardless of location.”

DBM Acting Secretary Kim Robert de Leon: “An efficient government begins with reliable digital infrastructure and data-driven decision-making. To advance our digital transformation agenda, we are providing PHP5 billion for the Free Public Internet Access Program, expanding connectivity to nearly 40, 000 access points nationwide enabling more Filipinos to access government services, education, and economic opportunities.”

What these moves mean for business leaders

The combination of tighter financial oversight and ambitious infrastructure planning creates a clear risk and opportunity profile. Regulators are tightening the rails to reduce systemic risk, while the government is inviting large-scale private investment to anchor an AI ecosystem.

Fintechs and payments players: Expect a 12-month planning horizon for OPS approvals. If you operate or plan to operate as a VASP (virtual asset service provider), treat yourself as a high-risk counterparty. Strengthen AML/KYC, improve transaction monitoring, prepare for stricter due diligence from banking partners, and plan for potential transaction or settlement limits.
Data‑center and energy investors: The plan’s targets, about 400 MW by 2030 and 1.5 GW by 2033, present substantive opportunity. But you must secure reliable power agreements, conduct grid and capacity studies, plan for water and cooling rights, obtain environmental and land permits, and negotiate tax and incentive terms to make projects bankable.
IT‑BPM firms and HR leaders: The 1.3 million reskilling target is an invitation to build micro-credential programs, project-based apprenticeships, vendor partnerships with cloud and AI providers, and KPIs that tie training to billable AI tasks, for example the percent of workforce certified in AI-assisted workflows.
Regional and compliance teams: Monitor DEFA’s implementation details closely. Cross-border data flows, payment interoperability, and cybersecurity standards will affect contracts, data-localization strategy, and liability allocation for AI services.
Private capital: The plan’s $21 billion private investment assumption is ambitious. Investors will look for anchor customers, off-take or capacity commitments, sovereign or blended finance instruments, and transparent timelines before committing at scale.

Concrete next steps (6-12 months)

Participate in consultations. The BSP is inviting comments on the draft OPS circular. Use the consultation window to shape practical compliance expectations.
Stress-test payment products. Model transactions under likely caps and enhanced monitoring and update AML thresholds and sandbox scenarios.
Run site-readiness and PPA diligence. Data-center developers should commission grid impact studies, water and cooling assessments, and negotiate long-term power agreements early.
Stand up reskilling pilots. Target fast, project-based credentials tied to revenue-generating AI services (AI automation, AI agents for customer support, AI for sales enablement).

Timeline to watch: near term, BSP consultation and DBM budget deliberations. 2026-2027, policy and pilot implementations and initial public-private project announcements. By 2030, phase-one 400 MW data-center deployments. By 2033, the 1.5 GW target and an operational national AI governance framework, per the plan.

Open questions worth tracking

How will the BSP coordinate with the SEC and other regulators on overlapping VASP and OPS rules? Operational coordination will determine compliance complexity for market participants.
What exact incentives and instruments will mobilize the $21 billion private investment assumed by PAIIM? Expect follow-on announcements on tax, land, and finance mechanisms.
What GPU mix (training vs inference, vendor models) underpins the 152, 000-GPU estimate, and how will that choice affect power, cooling, and latency requirements?
How will energy sequencing be achieved in practice? Which gas plants, renewables projects, and longer-term nuclear options will be deployed, and on what timeline?

Key takeaways, questions you’re likely asking

What exactly did the BSP propose on OPS registrations?

The BSP released a draft circular (Sept. 7) proposing a 12‑month suspension on accepting and processing new OPS registration applications to allow a holistic review of the OPS taxonomy and licensing framework; applications submitted before the suspension will be reviewed but approvals or denials will not be issued until the freeze ends.
How large is the Philippines’ AI infrastructure plan?

PAIIM 2026-2033 is a $34.4 billion national roadmap presented by DICT (Sept. 8), allocating $13.5 billion of public funds and targeting $21 billion in private investment, with aims to expand data‑center capacity from roughly 50 MW today to 1.5 GW by 2033 and to deploy about 152, 000 GPUs (as reported in the plan).
What workforce and economic impacts are projected?

The plan projects over 500, 000 AI‑related jobs plus some 175, 000 infrastructure jobs by 2033 and sets a reskilling target of 1.3 million IT‑BPM workers. These are government projections and will depend on implementation, private capital mobilization, and labor market dynamics.
How does DEFA fit into this?

Trade Secretary Ma. Cristina Roque promoted the ASEAN Digital Economy Framework Agreement (DEFA) on Sept. 7 as a region‑wide architecture for e‑commerce, payments, and cybersecurity; proponents say DEFA could ease cross‑border digital trade and support the Philippines’ ambition to attract regional AI workloads.
What should businesses do next?

Assume stricter payment and VASP rules in the near term, model longer timelines for OPS‑dependent launches, strengthen AML/KYC and transaction monitoring, and begin lining up energy, data‑center, and reskilling partnerships to capitalize on the medium‑ and long‑term AI infrastructure opportunity.

The Philippines has chosen to brace the payments system while betting big on AI infrastructure. That creates a window for strategic positioning. Tighten compliance and risk controls now, and invest in the operational and human capital needed to turn the $34.4 billion plan from an aspiration into a regional AI platform that supports AI for business, AI automation, and the growing market for AI agents and AI-enabled services.