BSP to raise penalties on breach of payment rules

The Bangko Sentral ng Pilipinas (BSP) will impose penalties and sanctions on financial institutions that would violate the rules governing the use of the country’s system for settlement of payments, with ”stiffer” punishments waiting for repeat offenders.

The Monetary Board approved Memorandum M-2024-039 that provided a “supplementary” policy on penalties and sanctions that the regulator could impose for breach of rules on the use of the real-time gross settlement (RTGS) system for peso transactions.

At present, PhilPaSS Plus is the country’s only RTGS system, which is owned and operated by the BSP. This system is used for settlement of large value funds transfers between financial institutions. It also facilitates the settlement of fixed-income security and foreign exchange trades, as well as other financial market transactions.

At the retail level, PhilPaSS Plus ensures that individuals, businesses and the government can securely send and receive money through several channels such as check, ATM, InstaPay and PESONet.

Sanctions

The BSP, led by Governor Eli Remolona Jr., said in a memo that it would impose penalties and sanctions—which may include fines and suspension or termination of access to the RTGS system—for noncompliance with specific requirements. Penalties can reach up to P75,000 per incident, depending on the gravity of the violation and the type of financial entity.

If the RTGS participant commits a combination of violations or multiple cases of the same offense, the BSP may impose penalties and sanctions ranging from a fine of P5,000 to P100,000. Suspension or termination of access to the RTGS system is also possible.

Such violations include a participant’s failure to properly manage their liquidity position and habitual scheduling of bulk settlements near the end of the settlement window. Not immediately notifying the BSP about a participant’s placement under insolvency, bankruptcy or rehabilitation is also an offense under the rules.

There are also penalties for noncompliance with reporting standards. This includes delayed, erroneous and nonsubmission of such reports.

The decision of the BSP to punish an offender will be final and executory after 15 calendar days from the receipt of the resolution unless a motion for reconsideration is timely filed.