BSP identifies pay systems key to strong bank sector

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THE Bangko Sentral ng Pilipinas (BSP) announced that it has designated the Philippine Peso Real Time Gross Settlement Payment System (Peso RTGS), the Philippine Domestic Dollar Transfer System (PDDTS), and the Philippine Peso-US Dollar Payment versus Payment System (Peso-USD PvP) as systemically-important payment systems (SIPS).

SIPS are payment systems whose critical operations pose, or may pose, systemic risk that could threaten the stability of the national payment system.

“These designations were made to strengthen financial stability through the enhanced safety, reliability and efficiency requirements for SIPS,” the BSP said.

SIPS are required by the BSP to adhere to the Principles for Financial Market Infrastructures, which ensure that payment systems have safeguards that are at par with global standards.

“SIPS are also subject to periodic assessment and closer supervision by the BSP to manage systemic risk and thereby better protect public interest and promote confidence in the use of payment systems,” BSP Governor Benjamin Diokno said.

The BSP-operated Peso RTGS enables inter-bank fund transfers and facilitates the settlement of various payment transactions using central bank money, or the demand deposit accounts maintained with the BSP.

“By settling near real-time in central bank money, the Peso RTGS contributes to the efficiency and safety of payment services offered by participating banks and financial institutions to their depositors and customers,” the BSP said.

On the other hand, the PDDTS enables inter-bank transfers and settlement of payment transactions, but this time for transactions denominated in US Dollars.

The Peso-US Dollar PvP, meanwhile, serves as a link between the PDDTS and the Peso RTGS to facilitate more efficient and reliable trades or exchanges between the Peso and the US Dollar.

The Philippine Clearing House Corp. (PCHC) is the operator of both the PDDTS and Peso-US Dollar PvP.

Image credits: CNN Philippiness