BSP PhilPaSS transactions surge 43.6% to P71T in Q1

MANILA, Philippines - The total value of financial transactions that passed through the central bank’s Philippine Payments and Settlements System (PhilPaSS) jumped 43.6 percent in the first quarter of the year on the back of robust remittances from overseas Filipino workers (OFWs) and due to improved economic activities in the country, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

BSP data showed that the value of financial transactions handled by PhilPaSS reached P71.18 trillion between January and March this year or P21.62 trillion more than the P49.56 trillion handled by the system in the same quarter last year.

PhilPaSS is an online and real-time gross settlement payment system administered by the central bank to facilitate payment transactions between banks. The large value handled by the system represents money in circulation that is being repeatedly processed by banks.

Data showed that the volume of transactions surged 34.8 percent to 271,550 in the first quarter of the year from 201,383 in the same period last year.

The BSP said the increase in the number and volume of transactions stemmed mainly from OFW remittances transactions processed and settled through the PhilPaSS Remit system.

Compared to none in the first quarter of 2010, the central bank data showed that a total of 71,212 OFW remittance transactions involving P2.89 billion were coursed through the PhilPaSS REMIT system in the first quarter of this year.

The PhilPaSS-Remit system is part of the advocacy of the BSP to help Filipinos abroad and their beneficiaries by providing a safer, faster, and cheaper means of remittance. The project is one of the initiatives undertaken by the BSP in coordination with the Association of Bank Remittance Officers Inc. (ABROI) through a memorandum of agreement (MOA) in December of 2009 but was implemented in the second quarter of last year.

The BSP has encouraged banks and financial institutions to course OFW remittances through the central bank’s electronic payment and settlement system so that beneficiaries of Filipinos working abroad could enjoy lower fees.

The BSP said the settlement of OFW remittances through the PhilPaSS Remit System would result in savings of between P100 and P500 per transaction as current system charges between P150 and P550 per transaction. OFW families are expected to save at least P92 million to as high as P922 million due to the faster and cheaper delivery of remittances to the beneficiaries at a lower rate of P50 per transaction instead of the current range of between P100 and P550 per transaction.

In the first quarter of the year, the BSP said the rise in the value of PhilPaSS transactions could be traced to the 53.3- percent jump in interbank call loans to P18.87 trillion followed by the 42-percent increase in treasury transactions to P28.29 trillion.

The increase could also be attributed to the rise in various transactions including the secondary market trades via the Delivery versus Payment (DvP); the tertiary market trades via expanded DvP (eDvP); cash deposits; and foreign exchange trade settlements via Payment versus Payment (PvP).

The value of PhilPaSS transactions inched up by 9.6 percent to P206.6 trillion last year from P188.5 trillion recorded in 2009 due to the increase is the number of processed and settled transactions.