The Bangko Sentral ng Pilipinas (BSP) released on 17 September 2021 BSP Circular No. 1127, adopting the governance policy for operators of payment system (OPS). The Policy forms part of new sections which will be created in the BSP's Manual of Regulations for Payment Systems.

All OPS which registered with the BSP pursuant to BSP Circular No. 1049 are covered by BSP Circular 1127, which recognizes that there are OPS which are BSP-supervised financial institutions BSFIs), non-bank financial institutions (NBFIs), non-bank electronic money issuers (EMI-NBFIs), cooperatives, branches or local subsidiaries of foreign-incorporated OPS, local subsidiaries or foreign entities and domestic corporations, and have set forth specific requirements for such OPS. Based on the latest data available, there are 162 OPS registered with the BSP, with 11 entities holding Provisional Certificates of Registration, as of 24 September 2021.

Without prejudice to stricter requirements for BSFIs, NBFIs, EMI-NBFIs and OPS engaged in other business, all OPS are required to have independent directors, which must comprise at least 20% of the members of their Board of Directors. Each OPS must also have a Board-level Audit Committee, and when required by the BSP, a Risk Oversight Committee and a Corporate Governance Committee. The Circular also lists the permanent and temporary disqualifications for OPS independent directors.

The Circular is part of the phased-in implementation of Republic Act 11127 or the National Payment Systems Act enacted in 2018 (NPSA).

The BSP is expected to issue other circulars implementing the NPSA. Earlier this year, an exposure draft of the proposed Regulatory Reporting Standards for OPS was released by the BSP for public comments. This series of regulatory releases in rapid succession is symptomatic of the radical shift by consumers to digital payments in the almost two years the Philippines has been living with COVID-19 and its restrictions. The zealous albeit catch-up response by the BSP regulatory-wise is no surprise as it is in line with its advocacy for financial inclusion and target to have majority of payments in digital cashless forms by 2023.

Attys. Elmer B. Serrano and Tephanie M. Gandia regularly advise clients on various matters relating to the NPSA and the National Retail Payment System (NRPS). Atty. Serrano is also the Corporate Secretary of the Philippine Payments Management, Inc. (PPMI), the designated payment system management body of the NRPS and likewise accredited as such body in accordance with the NPSA, while Atty. Gandia serves as Asst. Corporate Secretary of PPMI.

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