The Philippines’ payment and fund flow infrastructure will now be subject to tighter operating procedures to guarantee its integrity, the regulator said on Monday, August 16.

Bangko Sentral ng Pilipinas (BSP), central bank of the Philippines said its policy-making Monetary Board recently approved the designation of the Philippine Peso Real-Time Gross Settlement (PhP-RTGS) scheme as a “systemically important payment system”.

PhP-RTGS is the first structure to be designated as a systemically important payment system by the BSP under the National Payment Systems Act, which gives the regulator the authority to protect a scheme determined to be critical to protecting the public interest.

As a designated payment system, the PhP-RTGS shall observe the principles for financial market infrastructure as laid down by BSP regulations. The adoption of this standard ensures that the payment system is operating in condition at par with global practices on safety, efficiency, and reliability.

“The public can benefit from the safeguards that the designation provides as the PhP-RTGS, being the backbone of the payment supporting the flow of funds in the country, continues to operate fostering economic development,” the BSP said.

The PhP-RTGS is the sole payment system in the Philippines that facilitates settlement with BSP money. BSP’s open market operations and issuance of its securities are settled through the PhP-RTGS. Likewise, the system settles the Philippine peso leg of foreign exchange and domestic securities transactions.

Last year, the system settled a total of P544 trillion in transactions, which is about 30 times the P18 trillion nominal gross domestic product of the country for that period.

The BSP’s authority to designate payment systems is also a salient feature of the risk-based approach set in the payment system oversight framework which is part of the law’s implementing rules and regulations.