The Bangko Sentral ng Pilipinas (BSP) is moving to revise its payment settlement rules to streamline large-value payments, as part of plans to extend the operating hours of the Peso Real-Time Gross Settlement (RTGS) Payment System.

The initiative comes as several central banks worldwide have extended or are extending their own RTGS operating windows to reduce settlement risk and better align with cross-border payment flows across time zones. RTGS systems settle transactions individually and in real time, serving as critical infrastructure for interbank, government, and corporate large-value payments.

Under a draft memorandum, the central bank has proposed amendments that would establish two new settlement facilities alongside the existing Intraday Settlement Facility (ISF).

“The BSP amends its ISF policy to provide the participants in the Peso Real-Time Gross Settlement Payment System with access to liquidity throughout the RTGS system’s extended operating hours, ensuring seamless settlements for the duration of RTGS operations,” the central bank stated.

Three Proposed Facilities

The BSP would offer three RTGS Settlement Facilities (RSFs) to eligible direct participant banks and nonbanks with quasi-banking functions:

• ISF (Intraday Settlement Facility): Available during and after normal business hours, accessed via automatic transfer of all available funds from the participant’s RSF account to their settlement account.
• OSF (Off-Hours Settlement Facility): Serves participants before normal business hours begin, available by transferring funds from the RSF account to the settlement account during that period.
• E-ISF (Extended ISF): Allows next-day settlement when participants fail to repurchase their underlying securities within the prescribed period.

Both the ISF and OSF may be utilized multiple times within a business day.

All outstanding ISF availments that remain past the prescribed repurchase period before the end of post-normal business hours would be automatically converted to an E-ISF, the BSP said.

The draft also proposes allowing advance repurchase of all or selected securities under the ISF during the business hours of the Bureau of the Treasury’s (BTr) Enhanced National Registry of Scripless Securities (NRoSS) and before the repurchase period.

“The RSFs allow eligible participants of the RTGS PS to obtain intraday or off-hours liquidity from the Bangko Sentral through sale and repurchase of eligible securities, facilitating settlement and reducing gridlock that may arise from timing mismatches in the settlement of large-value payments,” the draft read.

Eligibility and Participation

A direct RTGS payment system participant may register as an RSF participant if they are a bank or nonbank with quasi-banking functions in good standing that owns eligible securities registered under their name in the BTr’s NRoSS.

Participants seeking RSF access must transfer securities to a designated sub-account under the BSP-RSF direct account in the NRoSS, either through direct or sponsored participation.

The central bank also plans to allow participants to retain eligible securities in the BSP-RSF account for multiple days, reducing the burden of daily securities posting. These securities may remain in the NRoSS until they become ineligible, the participant repurchases them before RSF maturity, or they are left unpurchased at E-ISF or OSF maturity.

A participant’s borrowing limit across all three RSFs would be based on the value of government securities moved into their BSP-RSF account, with deductions applied according to the BSP’s prescribed haircut.

Restrictions and Penalties

The proposed rules would prohibit participants with outstanding E-ISF balances from accessing the OSF or ISF. Similarly, those with outstanding OSF balances would be barred from using the ISF until the underlying securities are repurchased.

A participant’s right to repurchase securities would be forfeited if they fail to do so within the prescribed period under an E-ISF or OSF.

Fee Structure

The BSP outlined a tiered fee framework:

• ISF: Free, provided securities are repurchased within the prescribed period.
• OSF: Fee equivalent to the overnight lending facility (OLF) rate.
• E-ISF: Fee equivalent to the OLF rate plus 600 basis points.

Current System Performance

The ISF currently operates under PhilPaSS Plus, the country’s sole RTGS system, which is owned and managed by the central bank. The facility serves participants needing additional liquidity during daily operations and runs from 9 a.m. to 5:45 p.m. on weekdays, excluding holidays.

PhilPaSS Plus enables the instant settlement of payments, transfer instructions, and other obligations on a transaction-by-transaction basis.

As of end-2025, the total value of PhilPaSS Plus transactions reached a record high of P601.32 trillion, an increase of nearly 16% from the P519.08 trillion recorded at the end of 2024, according to BSP data. The sustained growth in transaction value underscores the rising demand on the country’s large-value payment infrastructure, which the proposed extended-hours framework is designed to accommodate. — Katherine K. Chan