MANILA -- The Monetary Board approved the designation of the Bangko Sentral ng Pilipinas (BSP)-operated Philippine Peso Real-Time Gross Settlement (PhP-RTGS) Payment System1 as a Systemically Important Payment System (SIPS).
PhP-RTGS is the first payment system to be designated as SIPS by the BSP under the National Payment Systems Act (NPSA). The law gives the BSP, as regulator of payment systems, the authority to designate a payment system if it determines the payment system as posing or having the potential to pose systemic risk or the designation is necessary to protect public interest.
As a designated payment system, the PhP-RTGS shall observe the Principles for Financial Market Infrastructures standard pursuant to BSP regulations. Adoption of said internationally-accepted standard will ensure that the payment system is operating in condition at par with global practices on safety, efficiency and reliability. The public can benefit from the safeguards that the designation provides as the PhP-RTGS, being the payments backbone supporting the flow of funds in the country, continues to operate fostering economic development.
The PhP-RTGS is the sole payment system in the Philippines that facilitates settlement with central bank money. BSP’s open market operations and issuance of its securities are settled through the PhP-RTGS. Likewise, the PhP-RTGS settles the Philippine Peso leg of PhP-US Dollar and domestic securities2 transactions. Also, it services the deferred net settlement of retail payment systems, namely checks, ATMs, PESONet, and InstaPay.
For 2020, the PhP-RTGS settled a total value of PhP544 trillion in transactions, which is about 30 times the PhP18 trillion nominal Gross Domestic Product of the same year.
The BSP’s authority to designate payment systems is also a salient feature of the risk-based approach set in the Payment System Oversight Framework or BSP Circular 1089 series of 2020, which is part of the NPSA’s implementing rules and regulations.
Under the framework, a SIPS refers to a payment system which poses or has potential to pose systemic risk that could threaten the stability of the national payment system.
Cognizant of this risk, participants of the PhP-RTGS, including BSP as owner and operator; and PhilPaSSplus members and operators of payment systems with PhilPaSSplus interface and critical service providers of the PhP-RTGS, among others, shall adhere to the rules, standards and requirements promulgated by BSP on SIPS and fulfill their respective roles to ensure safety, efficiency, and reliability of PhP-RTGS.
The PhP-RTGS runs in the PhilPaSSplus system, a new technology infrastructure that adopted the ISO 20022 messaging standard. (BSP)
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1 As defined in the NPSA, a payment system refers to the set of payment instruments, processes, procedures, and participants that ensures the circulation of money or movement of funds.
2 Government securities and fixed income private securities
