The Philippine central bank said a bill will be filed in the country’s Congress to reduce the clearing time for checks to just one day.
Currently, it takes anywhere from three to five days for a check to clear. Deputy Governor Juan de Zuñiga said the central bank and the Bankers Association of the Philippines have formed a technical working group to draft the bill.
“They are finalizing it and will be submitting the proposed bill for the consideration of the Monetary Board,” he said. “We are looking at filing the bill in Congress by the end of the year.”.
The bill will amend provisions of Republic Act 2031 or the Negotiable Instruments Law that provides that clearing of checks will be facilitated only once the original copies of the document are received by clearing houses.
It also provides that the encashment of a check should be done personally by the holder or by some person authorized to receive payment on his behalf in a “proper place” and “during banking hours.”
“Under the check truncation (process), the electronic image of a check will be sufficient basis for clearing,” De Zuñiga said.
He said faster check clearance will be in line with global practices. He noted that a reduced time of transaction reduces the risk of unsettlement and uncertainty.
The Philippine Clearing House Corporation, a private corporation that provides check clearing services, cleared a total of 172.4 million in checks in 2010, 2.7% more the 167.9 million checks in 2009.
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