President Duterte has signed a law mandating Bangko Sentral ng Pilipinas (BSP) to oversee and regulate all payment systems in the country.
Act No. 11127 or the "Law on regulation and supervision of payment systems" seeks to improve efficiency and reduce risks in the country's financial system.
"The State will support Bangkok Sentral's secure, secure, efficient and reliable payment systems to control systemic risks and provide an environment that will help sustainable economic growth," the law read.
The law, also called the National Payment Systems Act, allowed BSP to "oversee payment systems and exercise supervisory and regulatory powers to ensure the stability and effectiveness of monetary and financial systems".
RA 11127 defines a payment system as a "set of payment instruments, processes, processes and subscribers that provides money circulation or the movement of funds."
The BSP has the power to "determine" the payment system if it finds that the system poses a systemic risk or is a sign that is necessary to protect the public interest.
It may also require payment system operators to secure a priority body from BSP, as well as accredit or require self-regulation by the managing authority of the payment system organized by participants.
The Central Bank is also entitled to issue, through the Monetary Council, rules and regulations governing the level of payment system operation, the adequacy of resources to ensure security and operational reliability, the protection of end-user and service provider rights, among others
Other powers of the BSP are to issue orders to any payment system participant to ensure the security, efficiency or reliability of the system; require participants to submit operational reports and provide information for statistical, policy and regulatory purposes; and assess and collect from operators an annual fee to cover the expenditure.
The law also stipulated that the BSP will have the power to "own and operate payment systems, as the Money Council deems necessary."
It will also coordinate with other regulators and interested government agencies to avoid gaps, inefficiencies, duplication and discrepancies in the regulation of other systems linked to payment systems.
Within six months of the law being effective, all payment system operators must register with BSP.
Operators of a designated payment system are required to include as joint-stock companies and must meet the requirements prescribed by the Money Council. The Securities and Exchange Commission will not register the payment system's charter unless it is accompanied by a certificate of authorization issued by the Cash Board.
RA 11127 also stated that the designated payment system operator will be responsible for the maintenance and operation of a secure, efficient and reliable system.
Any person or entity violating the law shall be liable to a fine of P 200,000 to P 2,000,000 or to imprisonment from two to ten years of age or both at the discretion of the court.
The cash council may also suspend, disqualify, or revoke any officer of the designated payment system operator if it violates the system chart, delays reporting, refuses to allow review of operator matters, false testimony to the examiner, among others.
The law, signed by the President on October 30, will take effect 15 days after its publication in the Official Journal or in two newspapers. The BSP was entrusted with the implementation of the rules and regulations of the new law within 60 days of the effective date of the Act.