PRESIDENT Rodrigo Duterte has signed into law a measure giving the Bangko Sentral ng Pilipinas (BSP) the authority to oversee the payment systems in the Philippines.
Republic Act (RA) 11127, or The National Payment Systems Act, mandates the BSP to wield supervisory and regulatory powers for the purpose of ensuring the stability and effectiveness of the monetary and financial system in the country.
The law describes the payment system as "the set of payment instruments, processes, procedures and participants that ensures the circulation of money or movement of funds."
Under RA 11127, the BSP can designate a payment system, if such poses or has the potential to pose "a systematic risk" or if the designation is "necessary to protect the public interest."
The new law also requires operators of the designated payment system to secure prior authority from the BSP.
The BSP can issue, through the Monetary Board, directives and orders to any participant of a payment system, whenever the board has determined that it is necessary to ensure the safety, efficiency or reliability of a payment system or it is in the public's interest.
It can also require participants of payment systems to submit reports on their operations and provide information for statistical, policy development, supervisory and regulatory purposes.
The BSP has the mandate to assess and collect from the participants of the designated payment systems an annual fee in such amount, as may be necessary to cover expenses related to or incidental to the conduct of supervisory functions over such entities, subject to the rules prescribed by the Monetary Board.
Duterte's newly-signed law also notes that the BSP would have the authority to own and operate payment systems as may be deemed necessary by the Monetary Board.
"The Bangko Sentral shall have the authority to determine who shall be allowed to participate in payment systems owned and operated by it and who shall be allowed to open an account with the Bangko Sentral for settlement purposes," the new law states.
"The Bangko Sentral shall adopt internal safeguards to ensure appropriate independent oversight of its operator functions," it added.
The law also mandates the BSP to coordinate with other regulators and other concerned government agencies to avoid gaps, inefficiencies, duplications and inconsistencies in their respective regulation of other systems that are related to or interconnected with payment systems.
Operators of the designated payment system, except payment systems operated by the BSP, would be required to incorporate as stock corporations for the purpose of operating a payment system.
They should also meet the minimum requirements as may be prescribed by the Monetary Board.
The Securities and Exchange Commission (SEC) was directed not to register the articles of incorporation of any operator of a designated payment system, unless accompanied by a certificate of authority to register issued by Monetary Board under its seal.
The SEC would not also register the by-laws of any operators, unless they have a BSP-issued certificate of authority.
Duterte signed RA 11127 on October 30, but a copy of the law was released by MalacaƱang on Thursday, November 15. (SunStar Philippines)