12 December, 2018
Recent Developments
The Philippines has recently passed Republic Act No. 11127, otherwise known as the "National Payment Systems Act" (the NPSA), legislation intended to promote the safe, secured, efficient and reliable operation of payment systems within the Philippines. Following its publication on 17 November 2018, the NPSA will take effect on 2 December 2018.
Under the NPSA, all existing operators of payment systems are required to register with the Bangko Sentral ng Pilipinas (the BSP, or the Philippines' central bank and monetary authority) within six months from effectivity of the NPSA. On the other hand, operators of payment systems which will commence business or operations subsequent to the effectivity of the NPSA must register with the BSP within such reasonable period as may be prescribed by the Monetary Board of the BSP. The NPSA defines an operator of payment systems as an "entity that provides clearing or settlement services in a payment systems, or defines, prescribes, controls or maintains the operational framework for the system."
The NPSA further provides that operators of designated payment systems, except payment systems operated by the BSP, are required to incorporate as stock corporations for the purpose of operating a payment system, and meet the minimum requirements that may be prescribed for the purpose by the Monetary Board of the BSP.
The BSP is mandated to promulgate rules and regulations for the effective implementation of the NPSA within 60 days from effectivity of the NPSA.
Actions to Consider
Entities that operate or intend to operate payment systems should consider closely monitoring the issuance of the implementing rules and regulations of the NPSA to ensure continuing compliance with these new requirements prescribed under the NPSA, including the need to register with and adhere to the minimum requirements that may be prescribed by the BSP.
For further information, please contact:
Timothy Joseph (TJ) M. Mendoz, Partner, Quisumbing Torres
tj.Mendoza@quisumbingtorres.com
