MANILA, Philippines — Digital commerce in the Philippines is expected to receive a major boost after the central bank released the first set of rules that make it easier for banks and other parties to register as electronic payment operators.
At the same time, the Bangko Sentral ng Pilipinas (BSP) said Wednesday that firms covered by the new National Payment System Act (NPSA) — whether financial institutions or non-bank entities, like merchants — will have “streamlined” documentary requirements to “to promote efficiency and ease of doing business”.
The new rules were contained in a draft circular providing for the implementing rules and regulations of the NPSA which aims to promote the maintenance of a safe, efficient, and reliable payment system.
“As the first comprehensive legal and regulatory framework governing the payment systems in the Philippines, the NPSA can well support 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,” BSP said in a statement.
“Through a safe, efficient, and reliable payment system through which funds are transferred among banks and other institutions to discharge payment obligations arising from economic and financial transactions across the entire economy, the cost of exchanging goods and services is reduced,” it added.
It is, likewise, an essential tool for the effective implementation of monetary policy, and the smooth functioning of money and capital markets.
Since the use of payment systems is not limited to banks and nonbank financial institutions, the scope of the regulatory powers of the BSP are likewise expanded under the NPSA to cover non-financial institutions such as operators, their service providers, among others.
The draft circular is part of the first phase of the phased-in implementation of the NPSA, which prioritizes the creation of a baseline inventory of all operators of payment systems (OPS). This is required under Section 10 of the NPSA which provides that all OPS shall register with the central bank.
This inventory will also be used as inputs to the specific criteria for designating payment systems, as well as the oversight rules to be applied to such systems and the participants.
To ensure the smooth transition of the OPS existing at the time of the NPSA’s effectivity, the draft circular provides a transitory provision that allows said OPS to register with the central bank within a reasonable period.