Philippines: BSP sets rules for payment system
MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has issued rules for the participants in an infrastructure that provides real-time settlement of payments, funds transfer instructions, and other obligations individually on a transaction-by-transaction basis to ensure the smooth flow of funds in the financial system.
BSP Governor Felipe Medalla said that the Peso Real Time Gross Settlement Payment System (RTGS PS) is critical in maintaining price and financial stability as well as in preserving public interest.
“This payment system ensures the smooth flow of funds between financial institutions that maintain settlement accounts with the BSP. It also facilitates funds transfers in financial markets where these institutions trade securities and foreign currencies for business and risk management purposes,” Medalla said.
The rules comprise the first policy issuance of the BSP in its capacity as the RTGS PS operator under Republic Act 11127 or the National Payment System Act (NPSA).
The newly approved rules adhere to the Principles for Financial Market Infrastructures (PFMI) jointly developed by the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions.
“By complying with the PFMI, the rules aim to ensure that the RTGS PS will have in place the necessary safeguards that are in accordance with global best practices,” Medalla said.
The PFMI consists of 24 principles that apply to financial market infrastructures, 18 of which pertain to systemically important payment systems such as the RTGS PS.
The Monetary Board issued Resolution 1680 last Nov. 17, approving the rules and paving the way for Medalla to issue Memorandum M-2022-0049 requiring all RTGS PS participants to comply with all laws and regulations on payment systems and provide for penalties and sanctions.
RTGS PS participants include the BSP and financial institutions maintaining settlement accounts with the central bank, entities that are sponsored into settlement, as well as financial market infrastructures, clearing switch operators, and critical service providers within the RTGS ecosystem.
Aside from formally bringing the RTGS PS operations up to par with international best practices, the new rules are expected to promote inclusivity among RTGS PS participants.
“The rules will broaden access to the RTGS PS by allowing more financial institutions to participate in this critical infrastructure for large-value payments,” the BSP chief said.
The regulator has streamlined the qualification requirements for prospective members of the real-time payment system.
Thus, non-bank e-money issuers and other entities may now settle their retail transactions through the RTGS PS without the need for sponsorship by existing participants.
Last year, the BSP designated the RTGS PS as a systematically important payment system under the NPSA.
Systematically important payment systems are those that pose or have the potential to pose systemic risk to the stability of the national payment system.
These are subject to periodic assessment and closer supervision by the BSP, to better preserve public interest and promote confidence in the use of payment systems.
Source: https://www.philstar.com/business/2022/12/23/2232649/bsp-sets-rules-payment-system