Publication: Philippines Financial Sector Assessment Program: Philippine Payment and Settlement System
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Date
2019-08
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2019-08
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The Philippine payment, clearing, and settlement infrastructure consists of systemically important financial market infrastructures and retail payment systems. The Philippine payment and settlement system (PhilPaSS) was implemented in 2002 and is operated by the payments and settlements office (PSO) of Bangko Sentral ng Pilipinas (BSP) and the oversight function is with the payment system oversight department (PSOD) of BSP. The rules and regulations for implementation of the national payment systems act (NPSA) have to be notified by the BSP on an immediate basis to provide a high degree of certainty for payment systems in Philippines, including each material aspect of PhilPaSS’ activities. The BSP should obtain the approval of the Monetary Board (MB) for the operations of PhilPaSS as laid down under section 8 of the NPSA. It is recommended that BSP issue necessary secondary legislation under the NPSA covering the registration of payment systems. In order to ensure that the current governance framework adequately represents the interests of the relevant stakeholders in PhilPaSS, BSP may take suitable measures such as considering stakeholder representation in the Board Risk Oversight Committee (BROC) or in the digital payments transformation steering committee (DPTSC) for direct participants or alternately constitute user committees and undertake a public consultation process. The MB should establish a clear, documented risk-management framework that includes the PhilPaSS’ risk policy, assigns responsibilities and accountability for risk decisions, and addresses decision-making in crises and emergencies. It is accordingly recommended that: (i) the enterprise risk management (ERM) framework to include legal risk, credit risk, liquidity risk, settlement risk, custody risk, and reputational risk for PhilPaSS, apart from operational risk; and (ii) consider strengthening the BROC to enable it to also function as a risk committee for PhilPaSS in addition to its existing role.
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“Ramteke, Nilima. 2019. Philippines Financial Sector Assessment Program: Philippine Payment and Settlement System. © World Bank. http://hdl.handle.net/10986/36186 License: CC BY 3.0 IGO.”
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