1-day clearing of checks to start in January 2017

The Monetary Board has approved the electronic clearing of checks, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday.

To start on January 20, 2017, the new clearing process paves the way for depositors to have check deposits credited to their accounts within one banking day, according to the BSP.

The current clearing time for check deposits is three to five banking days, not counting weekends and holidays.

"Aside from promoting financial consumer welfare, this reform initiative enhances the efficiency of the domestic payment system and promotes the faster movement of goods and services in the country," the central bank said.

Around P135 billion worth of checks are transacted daily, emphasizing the need for an assurance that payments are being carried out and recipients to get a sense of finality in the arrival of funds, BSP Governor Amando Tetangco Jr. said in July when the deal with the clearing house was signed.

The Philippine Clearing House Corp. (PCHC), as the BSP-designated exclusive provider of electronic clearing services, will implement the clearing transactions via electronic presentation using the Check Image Clearing System (CICS).

"Funds will now be made available for the next banking day – for now – and even shorter in the long run," the central bank chief said.

"Using the PCHC's CICS, only the digital images of checks and their electronic payment information are needed to be transmitted to the paying bank," the central bank said.

"The previous clearing system requires the physical delivery of checks," it added.

As agreed by the BSP and the PCHC, the central bank will review the clearing house's regulations and examine its arrangements, processes, and systems for clearing check.

PCHC Chairman Abraham T. Co said the agreement entails enhancing the security features of checks, such as additional watermarks, and a shift to the digital clearing process.

"To ensure the smooth implementation of this new process, the BSP enjoins banks to actively participate in the preparations for electronic checks clearing," the central bank noted. — Ted Cordero/VDS, GMA News