Elasticity of Demand for Off-Net Payments in the Philippines

The John Gokongwei School of Management invites you to a Brown Bag Session on “Elasticity of Demand for Off-Net Payments in the Philippines". Our presenters are Dr Russell Toth, Assistant Professor at the School of Economics, The University of Sydney, and Mr Joaquin Emmanuel J. Gonzales, Instructor at the Department of Quantitative Methods and Information Technology, Ateneo de Manila University.

This will be held on Monday, 6 October 2025 from 1:00 - 2:30PM at the Cabochan Room, SOM 307 and online via Zoom. Please register here: https://bit.ly/jgsombrownbag6oct2025

Brief Description of the Topic:

One of the critical questions for emerging off-net payment switches is the pricing of off-net payments. Private sector providers tend to prefer a liberalized market for setting off-net prices, setting prices to suit their needs. In addition to generating revenue, some large financial service providers may see price-setting as a way to create frictions to off-net payments, discouraging clients from sending funds off their ledger. Meanwhile, regulators may see the regulation of off-net payments (e.g., capping prices, or even mandating a “zero price” on off-net payments) as a way to stimulate the adoption of digital payments and movement away from cash, driving financial inclusion. The study aims to evaluate the impact of changing the price of Instapay, an electronic fund transfer platform that facilitates transfers of e-money in the Philippines, on the usage of digital financial services. Preliminary data analysis done using a panel dataset of customer transactions with a financial service provider in the Philippines from 2021 to 2023 would show that the lifting of the Instapay zero pricing policy that was implemented during the COVID-19 pandemic has led to a 30% reduction in average transaction count and an increase of Php 3,000 (USD 51) in average transaction sizes. Likewise, the decline in transaction count associated with the Instapay price increase tends to be larger with females and to those that are based in rural areas. This reflects a high elasticity of demand for digital fund transfers across financial service providers in the Philippines.

About the Speakers:

Dr Russell Toth is a development microeconomist focusing on the development of the private sector, with projects often overlapping with environmental, agricultural, and behavioral economics, and political economy. He is involved in a number of projects collaborating directly with private sector enterprises, NGOs, governments or other partners, to evaluate, improve, and build rigorous evidence about products, programs and interventions, to improve economic and social impacts, and reduce poverty. He is currently conducting development-related research in Indonesia, Myanmar and the Philippines and has also gained fieldwork experience in Ethiopia, Fiji, Kenya, Papua New Guinea, and Vietnam.

Mr Joaquin "Joaqs" Gonzales has served as a faculty for the Ateneo de Manila John Gokongwei School of Management for six years, having taught courses in programming, business analytics, operations management, decision science, economics, statistics, and capstone project mentoring. He has completed a Master of Arts in Economics degree at University of the Philippines Diliman and a Master of Science in Data Science degree at the Asian Institute of Management. Along with his academic career in the Ateneo, he has engaged in data science consultancy roles with the Ministry of Finance and Budget Management and the Policy for Research and Legal Services agencies of the Bangsamoro Region along with the Asian Development Bank in 2023 to 2024. Likewise, he has served as an adjunct faculty in the Asian Institute of Management having taught courses for the institute's Master of Science in Data Science program. His research interests include impact evaluation, including big data and artificial intelligence applications in business and economics.