BANKERS ASSOCIATION OF THE PHILIPPINES

THE BANKERS Association of the Philippines (BAP) has renewed its partnership with Citi Philippines and the Philippine Clearing House Corp. (PCHC) for the enhancement and continued management and operation of the Philippine Domestic Dollar Transfer System (PDDTS) and the Payment-versus-Payment (PvP) System.

BAP, Citi Philippines, and PCHC signed an agreement on Aug. 28 to extend the partnership until Aug. 17, 2030.

“The success of the PDDTS/PvP has always been a story of collaboration — among our committees, our partners, and the broader financial community. Together, we will continue to strengthen our systems, adapt to change, and serve the needs of our economy,” BAP President Jose Teodoro K. Limcaoco said in a statement on Thursday.

BAP said the agreement is part of its efforts to further develop the Philippines’ financial market infrastructure.

BAP is the owner and the governing body of both the PDDTS and PvP System. Citi Philippines serves as the settlement bank, while PCHC acts as clearing operator and an operator of a designated payment system.

PDDTS was launched in 1995 and enables real-time domestic US dollar (USD) transfers among participating Philippine banks. Meanwhile, the PvP System, which was introduced in 2003, reduces settlement risk in cross-currency transactions.

Both systems were recognized and designated by the Bangko Sentral ng Pilipinas (BSP) as systematically important payment systems in 2022.

“The PDDTS and PvP systems, established by the BAP, have long supported financial stability, liquidity management, and efficient settlement across the banking sector,” the group said.

Under the extended partnership, BAP, Citi Philippines, and PCHC committed to key enhancements of the systems.

These include “improved IT infrastructure and service levels targeting 99.5% system uptime, faster incident response, proactive maintenance notifications, and upgraded business continuity protocols to ensure stronger disaster recovery and operational resilience.”

PDDTS will also shift its account interest calculations to use the Effective Federal Funds Rate from the London Interbank Offered Rate, which was phased out globally in 2023.

“With this venture, the banking industry is poised to benefit from stronger alignment with global payment systems, greater efficiency in domestic USD settlements, and enhanced support for financial market stability and industry innovation. These developments also reinforce operational stability and regulatory compliance, guided by the BSP in its critical roles as operator of PhilPaSS, settlement bank for the PHP leg of PvP transactions, and primary regulator of all designated payments in the country,” BAP said. — A.M.C. Sy