BSP Formalises Automation of Intraday Settlement Facility for Banks

Author: Fintechnews

Source: Fintechnews

2025/12/17 10:49

The Bangko Sentral ng Pilipinas (BSP) has formalised changes to its intraday settlement facility, allowing banks to automatically access central bank funds to cover queued or expected outgoing payments.

The move aims to ensure a smoother flow of liquidity through the domestic payment system.

Memorandum M-2025-039 outlines amendments to the manual of regulations for payment systems. These updates give regulatory force to the automation of the Intraday Settlement Facility (ISF).

The ISF is a liquidity mechanism that allows eligible participants to obtain funds from the BSP through a sale and repurchase (repo) agreement.

This process prevents gridlocks caused by timing mismatches in large-value payments.

Under the new automated setup, participating banks can obtain funds within minutes of initiating a repo with the central bank.

In contrast, the previous system credited proceeds manually and required manual acceptance, often causing delays.

The system now credits funds automatically, typically within seconds, reducing the risk that payments remain in the queue beyond 15 minutes.

The automation also helps banks avoid penalties triggered when payment instructions exceed the 15-minute threshold.

Regarding the extended ISF, participants must repurchase securities within the prescribed period on the following business day. Failure to do so will result in restrictions on future transactions.

The BSP enabled this enhancement by linking its payment system, PhilPaSSplus, with the Bureau of the Treasury’s Enhanced National Registry of Scripless Securities.

Regulators designate PhilPaSSplus as a Systemically Important Payment System (SIPS), meaning its stability remains critical to the national payment infrastructure.

Featured image by SohagShantonur via Freepik.

The post BSP Formalises Automation of Intraday Settlement Facility for Banks appeared first on Fintech News Philippines.

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