THE Bangko Sentral ng Pilipinas (BSP) announced on Monday that it has designated the Philippine Peso Real-Time Gross Settlement (PhP-RTGS) payment system as a Systemically Important Payment System (SIPS).
In a statement, the BSP said the PhP-RTGS is the first payment system to be designated as SIPS by the BSP under the National Payment Systems Act (NPSA).
Under the framework, a SIPS refers to a payment system posing or has potential to pose systemic risk that could threaten the stability of the national payment system. Its failure could endanger the whole economy.
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.
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.
The system also settles the Philippine peso leg of Peso-US dollar and domestic securities transactions. It also services the deferred net settlement of retail payment systems, namely checks, ATMs, PESONet, and InstaPay.
As a designated payment system, the PhP-RTGS shall observe the “Principles for Financial Market Infrastructures” standard pursuant to BSP regulations.
This includes the adoption of internationally-accepted standards to 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 BSP said.
In 2020, the PhP-RTGS settled a total value of P544 trillion in transactions, according to data from the BSP.