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PRESS RELEASES

SOURCE: Press and Public Affairs Bureau


House passes bill ensuring safe and efficient payment systems
16-June-2017, 09:32:27 AM


The House of Representatives has approved on third and final reading a bill seeking to ensure the safety, efficiency and reliability of payment systems.

House Bill No. 5000, or “An Act Providing for the Regulation and Supervision of Payment Systems,” recognizes the payment system as an important component of the country’s financial infrastructure and mandates the government, through the Bangko Sentral ng Pilipinas (BSP), to promote its high-quality operation in order to control systemic risk and provide an environment conducive to the sustainable growth of the economy.

The bill defines “payment system'' as the set of payment instruments, processes, procedures and participants that ensures the circulation of money or movement of funds.

Among the payment systems are debit cards, credit cards, and electronic fund transfers.

The bill seeks to grant the BSP the authority to oversee the payment systems and exercise supervisory and regulatory powers to ensure their security, dependability and efficacy, and the stability and effectiveness of the monetary and financial system.

It directs the BSP to carry out the following functions:

(1) Determine the payment system to be a “designated payment system” if it poses or has the potential to pose a “systemic risk” or when there is necessity to protect the public interest;

(2) Accredit or require a “payment system management body” organized by participants, i.e., operator, issuer, service provider, of the designated payment system;

(3) Require the participants of the designated payment system to comply with the provisions of the proposed “Payment Systems Act” and its implementing rules and regulations; and

4) Issue rules and regulations governing, among others: (a) the mechanism for the protection of the rights of the end-users and participants to the designated payment systems; (b) the appropriate measure to ensure the confidentiality of payment information; (c) the necessary measures to ensure the compliance of designated payment systems with the Anti-Money Laundering Act of 2001 and other related laws; (d) the standard of operation of payment systems and the conduct of examination of the participants of the designated payment systems; and (e) the adequacy of resources of operators of the designated payment systems to ensure that the designated payment systems have a high degree of security and operational reliability and have contingency requirements for timely completion of daily processing commitments.

The bill defines “designated payment system” as a payment system that has been determined by the BSP as posing a systemic risk, or having the potential to pose a systemic risk, or when there is necessity to protect the public interest.

It refers to a “payment system management body” as an entity organized by participants of the designated payment system for the purpose of self-regulation.

Furthermore, it refers to “systemic risk” as the failure of one participant in a payment system or in financial markets to meet its required obligations which will cause other participants or financial institutions to be unable to meet their obligations, including settlement obligations in a payment system.

The measure imposes fines, penalties, and sanctions on a participant of a designated payment system, its directors and officers, including any person or entity acting as operator without authority from the BSP, for violations of the proposed “Payment System Act” or rules and regulations issued by the Monetary Board, or order or instruction of the BSP Governor.

The fines to be enforced will be determined by the Monetary Board, but these shall not exceed P1,000,000 for each transactional violation or irregularity, or P100,000 a day for each continuing violation or irregularity.

The Monetary Board is also empowered to suspend, disqualify, or remove any of the directors of the operator of a designated payment system for willful commission of irregularities or the conduct of business that threatens the safety, efficiency or reliability of a payment system; willful making of a false or misleading statement to the Monetary Board or BSP; or willful delay in the submission of reports or publications as required by the rules and regulations pursuant to the Payment System Act.

The authors of the bill are Reps. Gloria Macapagal-Arroyo (2nd District, Pampanga), Ben Evardone (Lone District, Eastern Samar), Gus Tambunting (2nd District, Paranaque City), Henry Ong (2nd District, Leyte), Henry Oaminal (2nd District, Misamis Occidental), Jorge Almonte (1st District, Misamis Occidental), Ma. Theresa Collantes (3rd District, Batangas), Jocelyn Sy Limkaichong (1st District, Negros Oriental), Juliet Marie Ferrer (4th District, Negros Occidental), Orestes Salon (Party-list, AGRI), Julieta Cortuna (Party-list, A-TEACHER), Sitti Turabin-Hataman (Party-list, AMIN), Wilfredo Caminero (2ndDistrict, Cebu), Tom Villarin (Party-list, AKBAYAN), Marlyn Primicias-Agabas (6th District, Pangasinan), and Manuel Jose Dalipe (2nd District, Zamboanga City). / ABR

 
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