The Philippine economy can expect to see faster, more efficient and safer transactions and money transfers once an improved payments framework is adopted fully by the central bank and its private sector partners, according to the country’s chief financial regulator.
According to Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno, an industry-wide “rehearsal” is now in full swing for the live run of the new peso real-time gross settlement (RTGS) platform of the next-generation Philippine Payment and Settlement System, dubbed “PhilPaSSplus.”
“Since the kickoff of the PhilPaSSplus project in December 2019, all major preparatory activities have been going well through the BSP’s close collaboration with the industry,” he said in an online press briefing. “The outcome of this rehearsal will be a key consideration in determining the readiness of the peso real-time gross settlement ecosystem to go live by June 2021.”
The completion of the project’s user acceptance test by the BSP in the first quarter of 2021 kicked off the market rehearsal where key functionalities of PhilPaSSplus were being tested by banks and other participating institutions prior to implementation.
Safer, faster, more efficient
The new RTGS facility is equipped with state-of-the-art technology, enabling it to deliver comprehensive functionalities and settle larger volume of financial transactions of varying types and complexities.
“PhilPaSSplus is seen to significantly enhance the efficiency of funds flow within the economy. It is also expected to mitigate settlement risk among financial market players, aside from enhancing payment safety,” Diokno said.
As PhilPaSSplus will accept only communication messages which conform to the SWIFT-prescribed ISO 20022 format, it will advance interoperability of payment systems across the Philippines and the integration of the country with other jurisdictions in the payment space.
The switchover to PhilPaSSplus is one of the strategic initiatives of the BSP in fulfilling its mandate of maintaining a safe, efficient and inclusive national payment system. It is also an integral component of the BSP’s Digital Payments Transformation Roadmap 2020-2023.
Digital transformation
“With this new-generation Peso RTGS system, the financial services industry will be able to keep pace with the rapidly progressing digital transformation around the country and anywhere in the world,” the central bank chief said.
One of the BSP’s tools for monetary and financial stability, PhilPaSS is a fully automated RTGS facility that enables settlement of large-value payment transactions between customers of financial institutions, as well as interbank and financial market transactions between financial institutions, all of which require immediate settlement.
These include remittances of government collections by authorized agent banks to the Bureau of the Treasury; and settlement of securities and foreign exchange trades, and clearing results of retail payments done through checks, ATMs, InstaPay and PESONet. INQ