BSP bank payments system up 59% in transactions

MANILA, Philippines - The total value of financial transactions that passed through the central bank’s Philippine Payments and Settlements System (PhilPaSS) jumped 59 percent in the first nine months last year on the back of robust remittances from overseas Filipino workers (OFWs) and improved economic activities in the country, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Data released by the BSP showed that the value of financial transactions handled by PhilPaSS reached P234.7 trillion between January and September last year, or P87.05 trillion more than the P147.65 trillion handled by the system in the same period in 2010.

Likewise, the volume of transactions surged 29.6 percent to 864,965 in the first nine months of last year from 667,535 in the same period last year.

PhilPaSS is an online and real-time gross settlement payment system administered by the central bank to facilitate payment transactions between banks. The large value handled by the system represents money in circulation that is being repeatedly processed by banks.

The BSP said the increase in the number and volume of transactions stemmed mainly from OFW remittances transactions processed and settled through the PhilPaSS Remit system.

It pointed out that the rise in the volume of transactions was due to the increase in the following transactions: overseas Filipino remittances coursed through the PhilPaSS-Remit system, interbank lending or payments, intraday liquidity facility (ILF) availments or repayments, sales and purchases of government securities via delivery versus payment (DvP), e-DvP transactions, and cash withdrawal from banks.

For the third quarter alone, total PhilPaSS volume increased 15.3 percent to 317,835 due to the 112.3-percent increase in sales and purchases of government securities, 41.4-percent rise in e-rediscounting loan transactions, and 10.3-percent increase in PhilPaSS-Remit system.

The BSP also traced the increase to the 4.7-percent rise in interbank lending or payment, 4.2-percent increase in cash withdrawal from banks, and 2.7-percent rise in ATM network payments.

In terms of value, the BSP reported a 13.4-percent increase to P86.89 trillion in the third quarter from P76.63 trillion in the second quarter.

On a year-on-year basis, the value and volume of transactions accelerated 67.5 percent and 18.9 percent, respectively.

The PhilPaSS-Remit system is part of the advocacy of the BSP to help Filipinos abroad and their beneficiaries by providing a safer, faster, and cheaper means of remittance. The project is one of the initiatives undertaken by the BSP in coordination with the Association of Bank Remittance Officers Inc. (ABROI) through a memorandum of agreement (MOA) in December 2009 and was implemented in the second quarter of 2010.

The BSP has encouraged banks and financial institutions to course OFW remittances through the central bank’s electronic payment and settlement system so that beneficiaries of Filipinos working abroad could enjoy lower fees.

The value of PhilPaSS transactions inched up 9.6 percent to P206.6 trillion in 2010 from P188.5 trillion recorded in 2009 due to the increase is the number of processed and settled transactions.

BSP Governor Amando M. Tetangco Jr. said the central bank would continue to work with Congress towards the passage of a viable Payment Systems Act.

He said the proposed law would define and make official the oversight of the national payments and settlement system.