Adoption of the ISO20022 on Retail Payment Systems and on the Real-Time Gross Settlement System

Baruexo SeNrneL No Plr-rprNas OFFICE OF THE GOVERNOR MEMORANDUM NO. M-201s{02 To : BSP SUPERVISED INSTITUT|ONS AND pARTtCtpANTS OF THE PHILIPPINE PAYMENTS AND SETTLEMENTS SYSTEM lphitposs) subject: ADOPTION oF THE lso 20022 oN RETAtt PAYMENT sysrEMs AND ON THE REAI.TIME GROSS SETTTEMENT SYSTEM For the consideration of the financial community in their business decisions, we inform the local and global developments in the adoption of the international standards on messaging and communication of retail and large-value payments and settlement systems. THE ISO aOOZ?STANDARD ISO 2OO22 is a multi-part international standard prepared by the International Organization for Standardization (lSO) Technical Committee TC 6g - Financiaf Services. ISO 2OO22 provides an approach in developing financial messages based on internationally agreed standards on a) modeling methodologies, b) a dictionary of business terms used in financial communications, and c) registration process. ISO 20022 standardizes messaging systems for all financial initiatives with whatever counterparty (financial institutions, market infrastructures, customers, etc.), business domain (payments, securities, trade services, etc.), and network (public or proprietary, domestic or international), thereby facilitating the interoperability of financial payments and settlement systems and other financial initiatives. Additionally, the ISO 20022 addresses existing concerns in terms of high cost and difficulty in having to map data from one application to another given the varying standards that financial systems are currently using. LOCAL AND GTOBAT DEVETOPMENTS L. The Bangko Sentral ng Pilipinas is undertaking initiatives in further enhancing the efficiency and interoperability of domestic retail payments systems and the country's real-time gross settlement system. Pursuant to this direction, the BSP shall adopt the ISO 20022 and incorporate it as one of the features of the country's new real-time gross settlement system which shall be named PhilPaSSPt". The target soft implementation of the new system is on the 4ti quarter year 2020, with the full implementation by the l't quarter of year 202L.

Following a synchronized roadmap, the activities and timelines for BSP's ISO 20022 Migration Project and implementation of a new RTGS system include the following: Steps and Torqet Timelines PhilPoSSPtus ISO 20022 Miqration Procurement Process Q1- Q3:19 Q1:19 Environmenta I Scanning Q2 -Q4:19 Development and Testine Q3:19 - Q4:20 Q1:20 - Q4:20 Soft lmplementation Q4:20 Full lmplementation Q1:21 The ASEAN Working Committee on Payment and Settlement Systems (WC- PSS) has incorporated in one of the initiatives committed in its Strategic Action Plan, the adoption of international standards such as the ISO 20022 in both the retail and large-value payment systems. This is pursuant to the target to establish bilateral and multilateral linkages with the ASEAN region. In the dynamic space of payments and settlement system, the BSP highly encourages the financial community to move towards the adoption of ISO 20022 in their infrastructure connecting to various retail payment systems and PhilPoSS, to increase efficiency and interoperability among domestic as well as global payments and settlement system. The BSP encourages early action on or before the target soft faunch of the new PhilPaSS in the 4th quarter of year 2020. For information and guidance. ,-?3?*C-' I G. FONACIER fficer-in-Charge pJanuary 2OL9 Page2 of 2