BSP Issues Regulations on Peso Payments

The Bangko Sentral ng Pilipinas (BSP) has released regulations for those participating in the peso “real-time gross settlement payment system” (RTGS PS).

The RTGS PS is an infrastructure that gives real-time settlement of payments, fund transfer instructions, or other individual obligations on a transaction-by-transaction basis.

BSP has mentioned in a circular draft that the RTGS PS is “critical for maintaining price and financial stability, as well as preserving public interest.”

“This payment system ensures the smooth flow of funds between financial institutions that maintain demand deposit or settlement accounts with the BSP,” the draft circular read. “It also facilitates funds transfers in financial markets where these institutions trade securities and foreign currencies for business and risk management purposes.”

The BSP mentioned that the RTGS PS supports the mandate of the central bank regarding price stability.

“Moreover, this system plays an indispensable role in upholding public welfare by enabling the efficient and low-risk settlement of retail payments in central bank money.”

With this, the BSP adopted regulations for the RTGS PS operations. The regulations are part of BSP’s first policy issuance, being the operator of RTGS PS as stated in the National Payment System Act of Republic Act 11127.

According to the BSP, the recently approved regulations follow the Principles for Financial Market Infrastructures (PFMI) jointly drafted by the International Organization of Securities Commissions and the Committee on Payments and Market Infrastructures.

BSP Governor Felipe M. Medalla has mentioned that “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,”

Source: Business Mirror