BSP, BTr launch fully automated settlement facility

The Bangko Sentral ng Pilipinas (BSP) and the Bureau of the Treasury (BTr) launched the fully automated Intraday Settlement Facility (ISF) for financial institutions on June 27, 2024.

The facility is available to all eligible financial institutions encountering timing mismatches when settling transactions through the Peso Real-Time Gross Settlement (RTGS) Payment System operated by the BSP.

Made possible by linking BSP’s RTGS system (PhilPaSS^plus) with the BTr’s Enhanced National Registry of Scripless Securities, the ISF’s full automation aligns with BSP’s mandate of promoting a safe, efficient, and reliable mode of funds transfer to support financial stability.

Aside from preventing gridlocks in the PhilPaSS^plus from timing mismatches in the settlement of payments between participants, the ISF is designed to support a quick and efficient paperless process.

This allows PhilPaSS^plus participants to obtain funds within a few minutes after initiating a repurchase agreement or repo* transaction with the BSP. These funds can cover the participants’ queued or expected outgoing payment instructions in PhilPaSS^plus.

PhilPaSS^plus is the country’s only Peso RTGS system that enables efficient and low-risk settlement of large-value funds transfers between financial institutions.

This system also settles the clearing results of retail payments made by individuals, businesses, and the government using checks, ATMs, InstaPay, and PESONet.

PhilPaSS^plus is owned and managed by the BSP through the Payments and Settlements Department.

The Peso RTGS Payment System has been designated as a systemically important payment system (SIPS).

Under BSP’s Payment System Oversight Framework, SIPS refers to a payment system which poses or has the potential to pose systemic risk that could threaten the stability of the national payment system.

Participants are required to comply with the rules, standards, and requirements promulgated by the BSP and contribute towards ensuring the safety, efficiency, and reliability of the payment system.

*A repurchase agreement (repo) is a transaction in which the borrower temporarily lends a security to the lender for cash with an agreement to buy it back in the future at a pre-determined price.

https://datahelp.imf.org/knowledgebase/articles/484377-what-is-a-repurchase-agreement