By Melissa Luz T. Lopez, Senior Reporter
THE Bangko Sentral ng Pilipinas (BSP) has required banks and players to set up a task force to ensure that all payment systems will be compliant to global standards on digital financial data.
Memorandum M-2018-033 signed by BSP Governor Nestor A. Espenilla, Jr. mandates all participants of the domestic payments and settlements system to set up an industry task force to organize Philippine payments.
The task force is tasked to ensure that local players are compliant with ISO 20022, which is the international standard for electronic data exchange among financial institutions. The standards are also referred to as the universal financial industry message scheme used by players worldwide.
“The TF-ISO 20022 shall be the driving force of BSP and of the Philippine financial industry in ensuring the adoption of the global ISO 20022 message standards on payments, compliant with BSP’s roadmap and timelines, and in synch with the modernization of the country’s real-time gross settlement system,” the issuance read.
Once established, the task force is expected to draft guidelines for market practice based on the ISO rulebook, including mechanisms for monitoring. The industry must also collaborate with standard-setting bodies like the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which processes payment orders from one financial firm to another.
The task force will be co-chaired by a senior BSP official and a senior representative from the Bankers Association of the Philippines (BAP).
Industry officials will also sit as members of the task force from the BAP, the Chamber of Thrift Banks, the Rural Bankers Association of the Philippines, the Investment Houses Association of the Philippines and the Philippine Finance Association.
Third-party participants of the Philippine Payments and Settlements System (PhilPaSS) are also expected to take part in the industry-led body. These are automated teller machine network BancNet, Inc.; the Bureau of the Treasury, Philippine Clearing House Corp., the Philippine Dealings System Holdings, Inc., and other future participants.
All banks and quasi-banks have been using the PhilPaSS as their clearing platform since 2002, where they transact with fellow lenders, government offices and the central bank.
Mr. Espenilla said the Nov. 7 memorandum shall take effect “immediately.”
The BSP serves as regulator of all payment systems in the Philippines to keep track of all fund transfers across individual and corporate entities.
Separately, the central bank is also pushing for increased use of digital platforms to improve efficiency and reduce transaction costs. The central bank is targeting to raise the share of electronic payments to 20% of total transactions by 2020, coming from just one percent back in 2013.