The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines has revised guidelines to bolster the settlement of digital payments, ensuring the integrity and efficiency of the country’s payment system.
This move aims to adapt to evolving payment landscapes and enhance the operational flexibility of automated clearing houses (ACHs) under the National Retail Payment System (NRPS) framework.
In a circular signed by BSP Governor Eli Remolona Jr., the Monetary Board approved amendments to the guidelines governing electronic payment settlements. These changes, outlined under the Manual of Regulations for Payment Systems (MORPS), require prior BSP approval for any new rules or enhancements related to e-payment settlements.
“The circular requires prior BSP approval for new rules or enhancements to the settlement of e-payments under the Manual of Regulations for Payment Systems (MORPS),” the BSP stated. “This ensures that all enhancements to the settlement guidelines of ACHs are thoroughly reviewed and approved by the BSP prior to implementation.”
The revised guidelines allow ACHs, such as InstaPay and PESONet, to submit requests to the BSP for necessary adjustments aimed at increasing settlement cycles, supporting faster settlements, and improving overall e-payment efficiency.
For instance, an ACH may propose using a specific demand deposit account (DDA) maintained with the BSP for settling e-payments, subject to the central bank’s approval. This flexibility enables ACHs to respond to changing circumstances and emerging use cases.
The BSP, along with the Philippine Payments Management Inc. (PPMI) and the PESONet steering committee, has also activated the third settlement cycle for PESONet transactions as of July 8.
The PESONet’s multiple batch settlement (MBS) facility has now added a midday settlement, increasing batch settlements to three cycles per banking day. This addition complements the existing morning and end-of-day settlements.
“The rollout of ‘PESONet 3MBS’ shortens clearing intervals within a banking day, improves user experience by enabling faster crediting of funds to recipients’ accounts, and facilitates easier cash flow management for businesses,” the BSP explained. “It likewise enables PESONet participating banks and electronic money issuers better to manage settlement risks as settlement of PESONet transactions are now divided among three batches in a banking day.”
Launched in December 2015 under the NRPS, PESONet and InstaPay are designed to promote a safe, efficient, affordable, inclusive, and reliable retail payment system. PESONet facilitates high-value transactions and serves as an electronic alternative to the paper-based check system.
InstaPay, on the other hand, is a real-time, low-value electronic fund transfer facility for transactions up to P50,000, catering primarily to remittances and e-commerce.
Recent central bank data reveals that the value of electronic fund transfers via PESONet and InstaPay surged by 34.6% to P7.98 trillion in the first half of this year, compared to P5.93 trillion in the same period last year.
Moreover, the share of digital payments in total retail transactions increased to 53% last year from 42% in 2022, underscoring the growing adoption of digital payments in the Philippines.