By Lee C. Chipongian
After extending the suspension of Philippine Payment and Settlement System (PhilPaSS) fees three times since April, the Bangko Sentral ng Pilipinas (BSP) decided to waive charges for the whole of 2020 as part of relief measures for banks.
“As the Philippine economy strives to recover from the severe effects of the coronavirus pandemic situation, it is critical for financial institutions to continue to be able to effectively provide financial services and promote the digitalization of payment services, in tune with the changing economic landscape,” according to a memo signed by BSP Deputy Governor Ma. Almasara Cy Tuaño-Amador last June 5.
BSP Memorandum No. M-2020-048 (“Extension of the Temporary Relief Measure on the Transactions with PhilPaSS until the Last Business Day of Year 2020”) covers the fund transfer transactions’ fees made through the PhilPaSS, a real time gross settlement system owned by the BSP for the processing and settlement of interbank high value payment transactions through the demand deposit accounts maintained with the BSP.
“This (relief) measure is intended to provide further support for the efficient operations of financial institutions and foster a supportive environment within which BSP-supervised entities can extend improved financial intermediation services to the public and encourage the wider and broader use of digital payments,” said Tuaño-Amador.
She added that banks should “actively disseminate” this advisory and information to encourage more Filipinos to shift to digital transactions or e-payments.
“The BSP strongly encourages the participants of PhilPaSS to actively disseminate to the public the available automated clearing houses (InstaPay and PESONet) and PhilPaSS as facilities to electronically transfer funds to target recipient-accounts maintained with other banks participating in PhilPaSS, thereby providing Filipinos a wide range of digital payment channels,” said Tuaño-Amador.
The last memo on PhilPaSS fees was that the waiver was up to June 11 only after the enhanced community quarantine (ECQ) was downgraded to a general community quarantine (GCQ) last June 1.
The BSP suspended PhilPaSS fees on six types of transactions such as interbank, the peso-leg of US dollar trades and government securities trades, Philippine Clearing House Corp. (PCHC) transactions, automated tellering machines or ATM transactions and the manual processing of interbank transactions.
Pre-ECQ PhilPaSS fees for interbank transactions are already free for transaction of P100 or less. For the peso-leg of US trades a P5 fee is charged up to P500,000 transaction value and P10 from P500,001 to P1 million. PCHC transactions before the lockdown is charged P400 for transaction value of P40 million and above, while the peso-leg of government securities transactions and manual interbank transactions have ad valorem fees.
Since the lockdown began last March 17, utilization of the two electronic fund transfer services InstaPay and PESONet have increased with the former showing “exponential growth” while the latter “has shown considerable improvement,” said the BSP in a separate statement.
During the ECQ period which was implemented until May 31, the volume and value transactions of InstaPay and PESONet went up by 84 percent and 24 percent, respectively.
InstaPay is for “urgent” and small value transactions, and used to transfer money up to P50,000. PESONet is for high value transactions of companies, other businesses, government agencies and individuals. Money transfers under PESONet have no transaction limit per day.
The BSP said the trend of shifting to e-payments or from cash-based transactions to digital payments has “shortened the operating hours of financial institutions, and (ensured) the public’s avoidance of face-to-face transactions during the ECQ.”
PESONet is also utilized by the Social Security System (SSS) Small Business Wage Subsidy (SBWS).
BSP Governor Benjamin E. Diokno said PESONet registered a record month-on-month growth as of May of 300 percent in terms of volume. “This shows the critical role of PESOnet as an efficient channel not only for payments between business entities but also for the deployment of social aid,” said BSP Governor Benjamin E. Diokno.
Diokno has said that if more Filipinos will go the route of digital or e-payments—which rose during the COVID-19 lockdown, this will advance the objective of a cash-lite economy by 2023 or sooner.