BAP renews partnership with Citi, PCHC

To strengthen payment systems

MANILA, Philippines — The Bankers Association of the Philippines (BAP) has renewed its partnership with Citi Philippines and the Philippine Clearing House Corp. (PCHC) to ensure the continued operation and enhancement of the country’s domestic dollar and cross-currency settlement systems.

The agreement, signed on Aug. 28, extends the collaboration until Aug. 17, 2030 and covers the Philippine Domestic Dollar Transfer System (PDDTS) and the Payment-versus-Payment (PvP) facility.

As system owner, the BAP oversees the facilities, with Citi Philippines serving as settlement bank and PCHC acting as clearing operator and operator of a designated payment system (ODPS).

“These systems have always been a story of collaboration – among our committees, our partners and the broader financial community. Together, we will continue to strengthen our systems, adapt to change, and serve the needs of our economy,” BAP president Jose Teodoro Limcaoco said during the signing.

The PDDTS, launched in 1995, enables real-time dollar transfers among banks in the Philippines, while the PvP system, introduced in 2003, reduces settlement risk in cross-currency transactions. Both were recognized by the Bangko Sentral ng Pilipinas (BSP) in 2022 as systematically important payment systems.

Under the renewed agreement, the three institutions committed to upgrade information technology infrastructure and enhance system resilience. Targets include 99.5 percent uptime, faster incident response, proactive maintenance notifications and improved disaster recovery protocols.

The PDDTS will also shift its account interest calculation from the London Interbank Offered Rate to the Effective Federal Funds Rate.

“Citi Philippines is grateful for the opportunity to continue being the country’s sole settlement bank for PDDTS and to continue working with the PCHC, BAP and the BSP in making a mark – not just on our industry, but in the lives of our clients and the Filipino people,” said Citi Philippines CEO and banking head Paul Favila.

PCHC president and CEO Emmanuel Barcena likewise stressed their role in strengthening the system. “We deliver seamless, efficient and resilient operations that safeguard and power our financial system,” he said.

Industry players expect the enhancements to bring the country’s payment infrastructure closer to global standards, while ensuring greater stability, efficiency in domestic dollar settlements, and regulatory compliance under BSP oversight.