More small banks join gross settlement system

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) continues to on-board more rural banks in the country’s next generation real-time gross settlement system as the government ramps up its digitalization journey.

BSP Governor Benjamin Diokno said the number of rural banks participating in PhilPaSSPLUS  increased by 22 percent to 101 as of end-February  from  83 a year ago.

Diokno said the participating small banks represent more than 26 percent of all rural banks in the country, and more than half of total PhilPaSSPLUS membership.

“Moving forward, we will continue to intensify our efforts to onboard more participants, including small financial institutions in the countryside,” Diokno said.

By becoming PhilPaSSPLUS participants, the BSP chief said rural banks could offer digital payment services, particularly InstaPay and PESONet, which both settle through this platform.

“These enhanced services are expected to further improve the capacity of rural banks to onboard more unbanked Filipinos who will be able to benefit from digitalization. This provides broad support to the BSP’s thrust of promoting financial inclusion,” Diokno said.

Latest data showed the value of PhilPaSSPLUS transactions doubled to P42.43 trillion in February  from the same period in 2019 as transaction volume went up by 15 percent to 96,000.

Since starting its live run on July 26, 2021,  the new system – which can  now accommodate a growing number of settlements between financial institutions – has implemented  rigid controls to support transaction security in fund transfers and  enhanced system availability.

“We also see an uptrend in PhilPaSSPLUS transactions amid its increased membership and the improving economic climate as our country recovers from the pandemic,” the BSP chief said.

PhilPaSSPLUS also has broader access channels, enables integration with other payment systems locally and abroad, and allows for transparency, low cost and quick exchange of richer payment information for business and regulatory purposes.

“Since then, PhilPaSSPLUS has sustained the smooth flow of large value payments for major financial market transactions, as well as retail payment clearing for checks, ATMs, InstaPay, and PESONet,” Diokno said.

Under the Digital Payments Transformation Roadmap, the BSP aims to convert 50 percent of total retail transactions to electronic channels and increase the number of Filipino adults with bank accounts to 70 percent by 2023.