Bangko Sentral starts FX reporting system

By Keisha B. Ta-asan, Reporter

THE BANGKO Sentral ng Pilipinas (BSP) started its soft launch of the International Transactions Reporting System (ITRS) this week, requiring banks to submit reports of all transactions between residents and nonresidents through a sandbox.

In a memo signed by BSP Deputy Governor Francisco G. Dakila, Jr. on Jan. 8, the central bank said lenders must submit the reports using an application programming interface (API) in extensible markup language (XML) format.

“The banks may submit their reports through the sandbox or production portals of the ITRS system upon soft go-live,” BSP said. “Banks may continue setting up their systems and are encouraged to continue using the sandbox to test report submissions until further advised to ensure readiness upon full implementation of the ITRS system.”

The central bank said Philippine banks must submit reports via the ITRS portal upon full implementation of the reporting system, set for June 28.

The ITRS is a data collection system that obtains information from banks on peso and foreign currency transactions between a country’s residents and nonresidents, and transactions between residents that pass through the domestic banking system.

BSP earlier said the ITRS would monitor cross-border transactions and collect data for the country’s balance of payment statistics based on international standards. 

The ITRS system will also serve as a platform for supervision and monitoring of foreign exchange transactions by the BSP.

The central bank started pilot-testing the reporting system in November after briefing lenders a month earlier.

RTGS SYSTEMMeanwhile, the Philippine central bank has selected a nonbank electronic money issuer (EMI) to become part of the roster of financial institutions that settle high-value transactions through the Philippine Payment and Settlement System (PhilPaSS) Plus.

In a statement on Tuesday, BSP said OmniPay, Inc. would be the first nonbank EMI in its real-time gross settlement (RTGS) payment system. 

“The extension of PhilPaSS Plus access signals an era of a more inclusive national payment system, where nonbank financial institutions can make efficient and low-risk fund transfers without an existing RTGS participant sponsoring them into settlement,” it said. 

It added that direct access to PhilPaSS Plus also allows nonlenders to efficiently and safely manage funds and transactions with no less than the central bank.

The RTGS system provides instant settlement of payments, transfer instructions and other obligations individually on a transaction-by-transaction basis. It allows low-risk settlement of large fund transfers between financial institutions.

PhilPaSS Plus is an RTGS system that processes and settles high-value transactions between banks through the demand deposit accounts of the lenders maintained with BSP.

The growing number of settlements by financial institutions prompted the BSP to upgrade the PhilPaSS system to PhilPaSS Plus on July 26, 2020.

“Giving nonbank electronic money issuers access to the RTGS system is in accordance with the National Payment Systems Act, which authorizes the BSP to determine the institutions that are allowed to participate in payment systems owned and operated by it, and those that can open an account with the BSP for settlement purposes,” BSP Assistant Governor Mary Anne P. Lim said. 

“As direct participation in the Peso RTGS payment system is expected to become more diverse based on global trends, the BSP has rules in place to safeguard the entire Peso RTGS payment system,” she added.

There are 236 institutions using the PhilPaSS Plus to settle large transactions and retail payment clearing results arising from automated teller machines, InstaPay, PESONet and check transactions, the central bank said.

These institutions include universal and commercial banks, thrift banks, rural banks, digital banks, nonbank quasi-banks, clearing switch operators, financial market infrastructure and nonbank EMI participants.

The Philippine central bank also said it is among the first to have initiated direct access of nonbank entities to settlement services. 

“International standard-setting bodies have started developing access guidelines to ensure that the attendant risks remain manageable while payment systems continuously evolve amidst the emergence of new players and breakthrough financial technologies,” it added. 

Based on BSP data, transactions done through PhilPaSS Plus reached P129 trillion in the third quarter, 0.5% higher than a year earlier. Transaction volume settled and processed by PhilPaSS Plus climbed by 3.22% to 374,986 .

The BSP wanted 50% of the volume and value of retail transactions to be done digitally by the end of last year.