BSP okays payment system oversight
To improve the regulation of payment systems, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) has approved the Payment System Oversight Framework (PSOF) to ensure effective management of the industry and financial market.
“With the adoption of the PSOF, the BSP continues to promote a safe and efficient national payment system, which is crucial to the smooth functioning of financial markets and the stability of monetary and financial systems,” said the BSP.
The PSOF also empowers the BSP to accredit or revoke the accreditation of a Payment System Management Body (PSMB). With the new policy, the Monetary Board has approved the accreditation of a PSMB, the Philippine Payments Management, Inc. (PPMI). The BSP said this accreditation “deepens the foundation of the self-regulatory function of the PPMI over its members.”
In a statement, the BSP said with the framework they can have cooperative oversight with other regulators for activities and interlinkages between payment systems and other financial market infrastructures.
“The BSP will also designate payment systems which are systemically and prominently important,” it added. It explained that payment systems “which pose or have the potential to pose systemic risk that could threaten the stability of the national payment system (NPS) are considered systemically important” while those “prominently important ones” will have no systemic implication “but may have major economic impact or could undermine the confidence of the public in the NPS or in the circulation of money in general.”
The BSP said that a designated payment system and its participants must have closer oversight activities. “In the event that the operator of a designated payment system fails to satisfy regulatory expectations, resulting in a threat to the safety, efficiency, and reliability of the system, the PSOF provides for the appointment by the BSP of a manager for the designated payment system,” said the BSP.
For three months, Filipinos in the National Capital Region and other areas were forced to stay at home as protection against the coronavirus outbreak. Those that could, turned to digital financial services to do their banking and payment transactions.
PPMI president Abraham Co said InstaPay transfers for the month of April alone which was the second month of the strictest lockdown period, went up by 32.18 percent compared to March. Before the lockdown, transfer transactions were only growing by 10 percent.