Payment systems are essential to the effective functioning of financial systems worldwide. They provide the channels through which funds are transferred among banks and other institutions to discharge payment obligations arising from economic and financial transactions across the entire economy. An efficient, secure and reliable payment system reduces the cost of exchanging goods and services, and it is an essential tool for the effective implementation of monetary policy, and the smooth functioning of money and capital markets. It is this key role played by payment and settlement system (PSS) in the smooth functioning of an economy in general and its financial and monetary system in particular that gives the central bank (CB) a strong incentive for ensuring that an effective, reliable and secure payment and settlement system is in place.

In the Philippines, the BSP takes the lead in promoting an efficient payments and settlements system by providing:

  • a. the necessary infrastructure through the operations of the Philippine Payment and Settlement System or the “PhilPaSS”; and
  • b. a policy and regulatory framework, also known as the National Retail Payment System or NRPS, to establish safe, efficient and reliable retail payment system in the country.
 
 

Roles of BSP

The BSP performs the following roles in the payments and settlements system:

  1. Operator of the real time gross settlement system known as PhilPaSS
  2. Provider of credit facilities to banks as a lender of last resort
  3. Overseer of the payments and settlements system
  4. User of its own RTGS system
  5. Inititate changes/reforms for the payments system
 

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Laws and Regulations

 

Laws and regulations related to the operation of Philippine Payment and Settlement System (PhilPaSS):
The New Central Bank Act (RA 7653) under section 3, 30 and 102

BSP Circulars and Memorandum to banks and non-banks:

Circular No. 703, Series of 2010 Regulatory Requirements on Deposit Substitutes
Circular No. 681, Series of 2010 Revised Check Clearing and Settlement Processes
Memorandum No. M-2012-013 Implementation of the PhilPaSS Participant Browser
Memorandum No. M-2012-050 Standard Operating Procedures during Public Sector Holidays
Memorandum No. M-2013-055 Standard Coding System
Memorandum No. M-2015-013 Business Continuity Plan
Circular 921, Series of 2016 Amendments to Provisions of the Manual of Regulations for Banks and Manual of Regulations for Non-Bank Financial Institutions pertaining to the Interest Rate Corridor (lRC)System. (with guidelines for days declared as public sector holidays)

Rules and Regulations Governing the Philippine Payment and Settlement System (PhilPaSS)
Electronic Commerce Act of 2000 (R.A. No. 8792)

National Payment Systems Act (NPSA)

 

Republic Act No. 11127, or the National Payment Systems Act (NPSA), provides a comprehensive legal and regulatory framework which supports the twin objectives of maintaining a payment system that is necessary to control systemic risk and providing an environment conducive to the sustainable growth of the economy.

A payment system provides the channels through which funds are transferred among banks and other institutions to discharge payment obligations arising from economic and financial transactions across the entire economy. An efficient, secure and reliable payment system reduces the cost of exchanging goods and services. It is an essential tool for the effective implementation of monetary policy, and the smooth functioning of money and capital markets.

The NPSA mandates the BSP to oversee payment systems in the Philippines and exercise supervisory and regulatory powers for the purpose of ensuring the stability and effectiveness of the monetary and financial system.

Payment System Oversight Framework (Circular No. 1089)
Online Registration of Operators of Payment Systems (OPS)
List of OPS with Provisional Certificate of Registration (PCOR)
List of OPS with Certificate of Registration (COR)
Draft Policy Exposure

Principles for Financial Market Infrastructures

 

The Principles for Financial Market Infrastructures (PFMIs) were established as a result of the joint efforts of the Bank for International Settlements (BIS) - Technical Staff of the Committee on Payment and Settlement System (CPSS) and the International Organization of Securities Commissions (IOSCO) to strengthen core financial infrastructures and markets. The principles in three (3) sets of standards: 10 Core Principles for Systemically Important Payment Systems, 19 Recommendations for Securities Settlement (RSSS), and 15 Recommendations for Central Counterparties (RCCP) were harmonized to come up with a single set of standards that will cover all relevant financial market infrastructures: payment systems, central securities depositories, central counterparties ad trade repositories.

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Real Time Gross Settlement (RTGS) System: PhilPaSS

PhilPaSS is the acronym for Philippine Payment and Settlement System, a real time gross settlement (RTGS) system owned and operated by the Bangko Sentral ng Pilipinas (BSP) that processes and settles interbank high value payment transactions of banks through the demand deposit accounts of the bank maintained with the BSP. Read more...

The PhilPaSS Primer

Membership Requirements

   

*Bankers Association of the Philippines (BAP), Chambers of Thrift Banks (CTB), Rural Bankers Association of the Philippines (RBAP), Philippine Finance Association (PFA)

National Retail Payment System

The National Retail Payment System or NRPS is a policy and regulatory framework that aims to provide policy direction in carrying out retail payment activities through BSP supervised financial institutions (BSFIs) by defining high-level policies, principles, and standards, which when adopted, would lead to the establishment of a safe, efficient and reliable retail payment system.

Observance of the principles and standards result to: safety by ensuring the security of transactions and activities performed in the country’s retail payment system; and reliability by ensuring resiliency of operations against disruptive events. Efficiency in retail payments, on the other hand, is essentially about speed, convenience and affordability, which can clearly be supported by a shift to electronic payments. Thus, a key outcome of the NRPS is to increase adoption of electronic retail payments from 1% electronic payments in 2013 to 20% electronic payments by 2020. Read more...

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