The new system will ‘eliminate transport risks on the physical checks,’ said Tetangco. It will also address consumer protection issues that may come about from stolen or otherwise altered checks.
MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) said on Tuesday, July 12, that it was going to use a new electronic system to shorten the time it took to clear checks – from 3 days down to one day.
BSP Governor Amando Tetangco Jr. and Philippine Clearing House Corp. (PCHC) president and CEO Emmanuel Barcena signed a memorandum of agreement for the operationalization of its Check Image Clearing System (CICS).
“Through CICS of the PCHC, all of our checks are targeted to be cleared in a fully electronic environment starting January 6,” Tetangco said. “For those of us who really are not specialists in this area, if there is one take away from this development, it has to be the fact that funds will now be made available by next day at the latest.”
The new system will ‘eliminate transport risks on the physical checks,” said Tetangco. It would also address consumer protection issues that may come about from stolen or otherwise altered checks.
The PCHC processes about 700,000 checks daily, totalling an average of P135 billion.
For a growing economy
Tetangco also said the adoption of check truncation technology, among other types of payments and settlement infrastructure, would be critical for dynamic, growing economies.
The BSP chief cited a 2014 study from the Better than Cash Alliance, which revealed only 1% of the monthly retail transactions are done electronically.
“This validates our heavy reliance on cash and checks in conducting our business. At a time when technology has become scalable, portable and affordable, this apparent reluctance to parlay the benefits of technology can only translate to further inefficiencies via foregone opportunities,” he said. – Rappler.com