BSP lauds passage of NPSA

CEBU, Philippines — The Bangko Sentral ng Pilipinas (BSP) yesterday lauded the enactment of the National Payment Systems Act (NPSA) seen critical to the country’s payment systems development agenda and to the stability and efficiency of the monetary and financial system.

Republic Act 11127 or the NPSA provides a comprehensive legal and regulatory framework, which supports the objectives of maintaining a payment system.

A payment system provides the channels through which funds are transferred among banks and other institutions to discharge payment obligations arising from economic and financial transactions across the entire economy.

"An efficient, secure and reliable payment system reduces the cost of exchanging goods and services. It is an essential tool for the effective implementation of monetary policy, and the smooth functioning of money and capital markets," the central bank said in a statement Monday.

BSP Governor Nestor Espenilla Jr. said the "NPSA will foster a level playing field for all participants as they will now be governed by a single overarching legal and regulatory framework."

"This will bring about more competition, greater efficiency, and foster digital innovations for both banking and payments products and services,” he said.

President Duterte signed the legislation last October 30.

The NPSA mandates the BSP to oversee payment systems in the Philippines and exercise supervisory and regulatory powers for the purpose of ensuring the stability and effectiveness of the monetary and financial system.

Under the law, the BSP shall coordinate with other regulators and concerned government agencies to avoid gaps, inefficiencies, duplications, and inconsistencies in its regulation of other systems related to or interconnected with payment systems.

The law gives the BSP the power to designate a new payment system if it determines that the existing payment system is posing or has the potential to pose a systemic risk or the designation is necessary to protect the public interest.

Under the NPSA, the BSP has the power to require operators of designated payment systems to secure prior authority to determine the capability of the operator in terms of financial resources, technical expertise and reputation.

The BSP will issue implementing rules and regulations, and provide guidance to new entities covered under the NPSA on how to comply with the requirements of said law. The NPSA took effect 15 days after its publication in the Official Gazette last November 15.