Currency transfer systems designated as consistently important

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THE MONETARY BOARD aphas proven the designation of the Philippine Domestic Dollar Transfer System (PDDTS) and the Philippine Peso – US Dollar Payment versus Payment System (PvP) as Systematically Important Payment Systems (SIPS), the central bank said in a statement on Monday.

These systems will be subject to stricter oversight rules from the Bangko Sentral ng Pilipinas (BSP) due to the systemic risk they could pose to the financial system, based on Circular No. CL 2022-019 signed by the Governor of the BSP Benjamin E. Diokno on March 2.

Both PDDTS and PvP are operated by the Philippine Clearing House Corp. (PCHC) and were established by the Philippine Bankers Association.

The PDDTS is the only Philippine payment system that allows the transfer of funds in dollars from one bank to another without passing through correspondent banks in the United States.

Meanwhile, PvP is the only value exchange settlement system for peso and dollar. It is facilitated by both the PDDTS and the Peso Real-time Gross Settlement System or PhilPaSS.

After designation, the PCHC, as the operator of a designated SIPS, shall ensure that PDDTS and PvP operations remain secure and efficient.ffiscientist. The PCHC must also comply with the requirements of Republic Act 11127 or the National Payments Systems Act.

As designated payment systems, PDDTS and PvP must also comply with the Principles for Financial Market Infrastructures. These principles were developed by the Bank for International Settlements and the International Organization of Securities Commissions to help ensure the stability of payment systems during the crisis.

“The adoption of the said internationally accepted standard will support the BSP’s goal of digitizing half of retail payments by 2023,” the BSP said.

During this time, PDDTS and PvP participants will have to comply with reports requested by the central bank to assess the systems.

Last year, the PhilPaSS was named by the Currency Board as a consistently important payment system. — Luz Wendy T. Noble

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