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The Bangko Sentral ng Pilipinas (BSP) has fully automated the Intraday Settlement Facility (ISF) for financial institutions, targeting to expedite transactions and resolve timing mismatches.
This digital advancement was achieved in collaboration with the Bureau of the Treasury (BTr), and aims to enhance the efficiency of the Peso Real-Time Gross Settlement (RTGS) Payment System operated by the BSP.
The central bank and the Bureau of the Treasury launched the fully automated ISF last month, making it available to all eligible financial institutions facing timing mismatches, when settling transactions through the BSP-operated Peso Real-Time Gross Settlement (RTGS) Payment System.
This new facility links BSP’s RTGS system, PhilPaSSplus, with BTr’s Enhanced National Registry of Scripless Securities, thereby preventing mismatches and ensuring timely payments to banks for securities sold to the central bank.
The BSPstated that the full automation of the Intraday Settlement Facility aligns with their mandate to promote a “safe, efficient, and reliable mode of funds transfer in support of financial stability.”
The integration of this facility enables PhilPaSSplus participants to receive funds within minutes after initiating a repurchase agreement or repo transaction with the BSP, allowing them to cover queued or anticipated outgoing payment instructions in PhilPaSSplus.
PhilPaSSplus, the country’s sole Peso RTGS system, facilitates the efficient and low-risk settlement of large-value fund transfers between financial institutions.
It also handles the clearing of retail payments made by individuals, businesses, and the government through checks, automated teller machines, InstaPay, and PESONet.
The Peso RTGS Payment System has been designated as a systemically important payment system (SIPS) that poses, or has the potential to pose systemic risk, threatening the stability of the national payment system.
Consequently, participants in the system must adhere to BSP rules, standards, and requirements, contributing to the safety, efficiency, and reliability of the payment system.
Featured image credit: Edited from Freepik