Philpass for rbap annual convention 25 may 2012

The Philippine Payments System

BELLA S. SANTOS

Director Payments and Settlements Office

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Outline of PresentationA. Overview of National Payments System

A. What is the National Payments System (NPS)B. The NPS FrameworkC. The NPS NetworkD. The PhilPaSSE. PhilPaSS Participants

B. How RBs Participate in PhilPaSSC. The PhilPaSS REMIT System (Overseas REM)D. The PhilPaSS REMIT System (Domestic REM)

The National Payments System

• The National Payments System includes the country’s entire matrix of institutional and infrastructure arrangements and processes through which money is transferred between savers and borrowers, buyers and sellers or from one party to another party.

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Used to initiate and direct the transfer of funds between the accounts of payers and payees at financial institutions

NATIONAL PAYMENTS SYSTEM

PAYMENTS INSTRUMENTS

FINANCIAL INSTITUTIONS

MARKET ARRANGEMENTS

LAWS, RULES , STANDARDS & PROCEDURES

PAYMENTS INFRASTRUCTURE

Used for transacting and clearing payment instruments, processing and communicating payment information, and transferring the funds between the paying and receiving institutions

provide payment accounts, instruments and services to consumers, businesses and organizations that process payment transactions, and provide clearing and settlement service networks for those financial institutions

such as conventions, regulations and contracts for producing, pricing, delivering and acquiring the various payment instruments and services

set by legislators, courts and regulators that define and govern the mechanics of the payment transfer process and the conduct of payment service markets

If financial transactions are the lifeblood of the

economy, then payment system is the circulatory system that enables the

smooth flow of these transactions

The National Payments SystemFramework

PhilPaSS

SWIFT

PPS-FES

KBs

TBs/SBsRBs/

NBQBs

PhilPaSS REMIT

THIRD PARTY

SYSTEM

FX TRADES

DvP

ATM NETWORKS

eDvP/REPO

CHECK CLEARING

OFW REMITTANCES

BSP LIQUIDITY TOOLS:

BSP INTERNAL SYSTEMS

oINTERBANK FUND TRANSFERS o HIGH VALUE CUSTOMER PAYMENTSo REMITTANCE OF BIR TAXES/BOC CUSTOM DUTIES TO BTro CASH WITHDRAWALS FR BSP CASH DEPTo SDA/RRP

oINTERBANK FUND TRANSFERS o HIGH VALUE CUSTOMER PAYMENTSo REMITTANCE OF BIR TAXES/BOC CUSTOM DUTIES TO BTro CASH WITHDRAWALS FR BSP CASH DEPTo SDA/RRP

o INTRADAY LIQUIDITY FACILITYo OVERDRAFT CREDIT LINE

o INTRADAY LIQUIDITY FACILITYo OVERDRAFT CREDIT LINE

o RPo EMERGENCY LOANo RPo EMERGENCY LOAN

o cFASo IRISo COCAS

o cFASo IRISo COCAS

THE PHIL PAYMENTS SETTLEMENTS SYSTEM

o SFCSo eREDISCOUNTINGo SFCSo eREDISCOUNTING

Who are the Participants of PhilPaSS

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Rural Banks Participating in PhilPaSS

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Crediting of Proceeds from E-Rediscounting

Direct to DDAServe as Settlement Bank

On OFW /DomesticRemittances

Facilitate Deposit For BSP Reserve

RequirementPurposes

Benefits for RB’s Membership in PhilPaSS

ElectronicManagement of

DDA Balance

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Electronic Payment of

Maturing Loans

Facilitate Transfer of Excess

DDA Funds toAccount in KBs

Facilitate Interbank Fund

Transfers

HOW TO PARTICIPATE IN PHILPASS?

PhilPaSS Roving Team• Considering the geographical locations of the rural

banks, the Payments and Settlements Steering Committee, the policy making body on payments and settlements, created the PhilPaSS Roving Team (PRT).

• This team is tasked to reach out to rural banks and thrift/savings banks located outside of Metro Manila that are not yet member of PhilPaSS.

Services rendered by the PhilPaSS Roving Team (PRT)

• Process and approve PhilPaSS Participation Documents on-site

• Install the PPS-FES Client Software in the RB’s official PCs on-site

• Train RB’s authorized users of PhilPaSS. Authorized PhilPaSS Users include bank’s operations and IT personnel

How to avail of the PRT Services?• Send a Letter of Invitation expressing interest of the rural banks in your

federation to avail of the services of the PhilPaSS Roving Team to:Atty. Juan D. De Zuñiga, Jr. Deputy Governor

Resource Management Sector and Security Plant Complex & Concurrent General Counsel

• Arrange a venue for the PhilPaSS Roving Team one-stop shop.

• Coordinate with your Federation-member banks to submit the documentary requirements for PhilPaSS membership. Forms are downloadable from BSP website: www.bsp.gov.ph, [please click Payments and Settlements/Philippine RTGS: PhilPaSS/Forms Items I and II B (PPS-FES Users –Non-SWIFT)].

How to avail of the PRT Services?• Inform the member-banks to bring their official PCs or computers

for PPS-FES Software installation and send at least two (2) authorized users and one IT personnel to attend the user training.

• After the approval of each rural bank’s membership, installation of the software and training of users, the banks will only be able to commence transacting business with PhilPaSS after the approval of the Users Acceptance Testing Form and the generation of the passwords of the banks’ authorized users which will be processed at the BSP Head Office.

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Signed PhilPaSS

Participation Agreement

Signed System Certification Checklist duly

approved by the BSP’s ITSS

Certification as accredited

member of the RBAP

REQUIREMENTS FOR MEMBERSHIP IN PhilPaSS

Letter of Application

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Dial-Up Registration

Form

List of Officers authorized to sign the PhilPaSS transactions

Invitation For the Ilo-Ilo, Aklan & Capiz Federation of RBs

• The PhilPaSS Roving Team will conduct the One-Stop-Shop Forum at the BSP Roxas City Branch on 8 June 2012.

• PhilPaSS Application Kit can be obtained from the PhilPaSS Booth located near the RBAP Secretariat. The Kit contains all the documents needed to be accomplished and submitted at the PRT One-Stop-Shop Forum at the BSP Roxas City Branch for evaluation and approval

• Please inform the PSO that you will be attending the forum on or before 28 May 2012 by sending us email at [email protected] or at [email protected] or you may call PSO at (02) 400-7071

The PhilPaSS One-Stop-Shop Forum

• In the PhilPaSS One-Stop-Shop Forum, the PRT will evaluate and approve your PhilPaSS participation documents, so before coming to the Forum, be sure that all the documents are complete.

• The participating banks need to bring at the Forum their official PC/laptop where the PPS-FES Client System will be installed.

• The participating banks need to send two (2) PhilPaSS users and one IT personnel for the PhilPaSS training. A Users Acceptance Test Form will be signed by the participants which will be used as basis for the generation of their PASSWORDS. Generation of the passwords will be done at the BSP Main Office and will be sent to the participants thru registered mail.

The PhilPaSS REMIT System(Overseas Remittances)

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1. Allied Banking Corp.

2. Asia United Bank New Participants

3. Banco de Oro Unibank 1. Philippine Veterans Bank

4. Bank of the Philippine Islands 2. Al Amanah Bank

5. China Bank 3. Philippine Bank of Communications

6. Development Bank of the Phils. 4. First Consolidated Bank

7. Land Bank of the Philippines 5. East West Bank

8. Metrobank

9. Philippine National Bank

10. Rizal Commercial Banking Corp.

11. United Coconut Planters Bank

12. Philippine Savings Bank

PhilPaSS REMIT Participants – as of Jan. 2012

PhilPaSS REMIT Status Update

PARTICULARS 2011 2010NO OF PARTICIPANT BANKS 17 12VOLUME OF TRANSACTIONS 320,845 112,638VALUE OF TRANSACTIONS P12,629,064,648 P4,003,799,184

OFW Remittances via PhilPaSS - REMIT

BSP-PhilPaSS

OFW Beneficiary Account with Bank B

Features: - Rules are covered by a MOA between BSP, BAP, CTB, RBAP and ABROI,

- Same day Bank-to-Other-Bank settlement

- Lower costs

- Effective feedback mechanism

- Safe and smooth operations

ABROI Branch/ Remittance

Partner Abroad

ABROI Bank (A) in the Philippines

Funds Transfer from ABROI Bank A to Bank B

Remitting/ Sending Bank (Remittance Transactions

Processing)

PhilPaSS REMIT SYSTEM

Remitting Bank

BSP Network

PhilPaSS PhilPaSS ServerServer

Mainframe

PhilPaSSPhilPaSS CAS CAS

REMIT Gateway REMIT Gateway ServerServer

1 Remitting/Sending bank sends transactions (Input File) from 9:00AM-3:00PM.

6 Generates Reply File with Settlement Status

2 System validates transactions. Summarizes valid transactions per beneficiary/receiving bank.

5 Sends Settlement Status

3 Sends summarized transactions to PhilPaSS-CAS for settlement.

4 Checks if remitting/sending bank has sufficient DDA balance (9:00AM-5:45PM); debits its DDA and credits the DDA of the beneficiary/receiving bank.

7 Remitting/sending bank retrieves Reply File

Beneficiary/ Receiving Bank (After Processing &

Settlement of Remittances)

PhilPaSS REMIT SYSTEM

PhilPaSSPhilPaSS Server Server

REMIT Gateway ServerREMIT Gateway Server

1 BSP processes settled transactions and creates Beneficiary File (per Receiving Bank); sends file to Gateway Server. (9AM-5:45PM)

Receiving Bank

2 Receiving Bank retrieves Beneficiary File

BSP Network

3 Receiving Bank posts transaction to the account of Beneficiary/Customer.

4 Receiving bank updates Beneficiary file with Posting Time Stamp, if posted. If not posted, indicate reason. (up to 4:00PM the following banking day)

5 BSP generates Report on OFW remittances (Annex 2) after 4:00PM the following banking day; sends to Gateway Server for information of remittingbank.

Timelines• The Remitting Bank can send as many files to

PhilPaSS from 9:00 am to 3:00 pm.

• The PhilPaSS processes and settles the files sent by Remitting Bank and provide feedback of the status of settlement within 5 seconds.

• Details of all transactions settled will be sent to the Beneficiary Bank for credit to the accounts of the ultimate beneficiaries on the same day.

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Feedback Mechanism• Upon credit to the account of the ultimate

beneficiary, the Beneficiary bank will submit to BSP status of each transactions.

• For unposted transactions due to invalid acct number, closed or dormant account or other erroneous parameters, the Beneficiary bank is given up to 4:00 pm the next banking day to submit status of the transactions and return the corresponding money to the remitting bank. Failure to submit updates will be subject to penalty for every day of delay.

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Fees• The participating banks will set the Front-end

fees to be collected by the Remitting bank from the remitter.

• BSP-PhilPaSS will charges the bank a P5.00 transaction fee for each remittance transaction.

• The banks agreed (as indicated in the MOA) that a standard rate of P50.00/transactions will be collected by the Beneficiary Banks as back-end processing fee.

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The PhilPaSS REMIT System(Domestic Remittances)

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Remitting Banks

BSP PhilPaSS

Beneficiary Banks

Beneficiaries Account

DOMESTIC REMITTANCES PROPOSED TRANSACTION FLOW & FEEDBACK MECHANISM DIAGRAM

Remitting Banks – are banks that receive remittances from the remitter. These could be commercial banks, thrift banks or rural banks. Transactions may originate from Metro Manila or from the provinces, cities or municipalities.

Beneficiary Banks – are the banks where the remittances are credited and where the beneficiaries maintain accounts.

Feedback mechanism – requires that participating beneficiary banks need to send status to PhilPaSS of the time theremittance has been credited to thebeneficiary’s account. Failure of thebeneficiary bank to send said status, the system will automatically debits back the bank for the remittance.

Beneficiary Bank

4. Upon notification that its DDA has been credited, the Beneficiary bank, downloads from the REMIT gateway the details of the depositors/ beneficiaries for further crediting of their accounts.

5. The Beneficiary bank sends Status Report to the BSP-REMIT gateway once it has credited the account of its depositor/beneficiary.

BSP-PhilPaSS REMIT System

2.Upon posting of the file of remittances for deposit to other banks by the remitting banks, the system aggregates the records by beneficiary bank and settles the transactions by debiting the DDA of the Remitting Bank and crediting the DDA of the Beneficiary Bank.

3. The REMIT System creates the Beneficiary file for each of the banks credited in the BSP-REMIT gateway.

6. The BSP-REMIT, upon receipt of the Status Report will notify the Remitting Bank that the remittances have been received by the beneficiaries

Remitting Bank

1. Extracts from its records domestic remittances for deposit to other banks and transmit the file to the BSP-PhilPaSS REMIT gateway .

7. The Remitting Bank, upon receipt of the notification from the BSP, will inform the remitter that the remittances have been received by the beneficiaries.

DOMESTIC REMITTANCES PROPOSED TRANSACTION FLOW

I am ready na for your questions

po!