BSP automates intraday settlement

THE Bangko Sentral ng Pilipinas (BSP) has fully automated the Intraday Settlement Facility (ISF) for financial institutions to expedite transactions and resolve timing mismatches.

The central bank and the Bureau of the Treasury (BTr) 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.

The facility links BSP's RTGS system (PhilPaSSplus) with BTr's Enhanced National Registry of Scripless Securities to prevent mismatches and ensure timely payments to banks for securities sold to the central bank.

The full automation of the ISF, the central bank said, aligns with their mandate to promote a «safe, efficient, and reliable mode of funds transfer in support of financial stability.»

It added that this 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 is the country's sole Peso RTGS system, facilitating 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.

Hence, participants to the system must adhere to BSP rules, standards, and requirements, contributing to the safety, efficiency, and reliability of the payment system.