By Arjay L. Balinbin, November 15 2018; Business World
Image Credit to Manila Bulletin
PRESIDENT Rodrigo R. Duterte signed late last month Republic Act (RA) No. 11127, which regulates payment systems, the Palace said.
Mr. Duterte signed RA 11127 or “The National Payment Systems Act,” as part of the government’s goal to “promote, through the Bangko Sentral ng Pilipinas (BSP), the safe, secure, efficient and reliable operation of payment systems in order to control systemic risk and provide an environment conducive to the sustainable growth of the economy.”
Under the law, the BSP will “oversee the payment systems in the country 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 has the power to require operators of designated payment systems to obtain the bank’s authorization, a process in which the BSP will evaluate an applicant’s financial resources, technical expertise, and reputation. The bank can also accredit a payment systems management body organized by the industry for the purpose of self-regulation.
Other powers granted to the BSP are issuing, through the Monetary Board, directives and orders to any participant in a payment system, requiring participants to submit reports on their operations, and assessing and collecting annual fees.
The new law recognizes the following threats to the integrity of the payments system: “violation of existing laws, rules, and regulations by the operator; failure of the operator to comply with any order of the Monetary Board; assets of the operator are not sufficient to give adequate protection to its participants or end-users; capital of the operator is eroding in a manner that may detrimentally affect its participants, users, or the public in general; or any other financial or business condition of the operator which may be considered by the Monetary Board to be prejudicial to the interests of its participants, users, or the general public.”
Violations face fines “of not less than P200,000 or more than P2 million or imprisonment of not less than two years nor more than 10 years, or both, at the discretion of the court.” — Arjay L. Balinbin