Philippine Clearing House Corporation

Philippine Clearing House Corporation (PCHC) was incorporated in July 1977, as a private corporation co-equally owned by all commercial banks enlisted as members of the Bankers Association of the Philippines (BAP). PCHC commenced its LIVE operations on 06 June 1980 and stood proud being the FIRST Automated MICR Cheque Clearing House in Southeast Asia.

PCHC provides cheque clearing services covering sixty-nine(69) geographical regions processing a daily average of 704,000 clearing items from more than 5,600 participating bank branches nationwide. Fulfilling the corporate status as exclusive cheque clearing service provider for the country fittingly highlights PCHC’s operational existence.

Trusted as a neutral service bureau, PCHC extended its operating outfit by implementing several electronic- based payment system services for the banking community such as the Electronic Peso Clearing & Settlement (EPCS)System, Philippine Domestic Dollar Transfer (PDDTS) System and the Project Abstract Secure (PAS) System.

PCHC continues to reconfigure and retool its facilities to provide new clearing and settlement services for the banking industry.

PCHC – THE FIRST 3 DECADES

On 29 July 1977, the Philippine Clearing House Corporation (PCHC) was incorporated as a private corporation co-equally owned by all commercial banks enlisted as members of the Bankers Association of the Philippines (BAP). Its main purpose was to automate the Cheque Clearing System thru the medium of MICR-encoded cheques. The existing system then was faced with an ever increasing volume of items that were manually processed, sorted and tabulated by the banks in tally sheets to arrive at clearing balances.

With the Clearing House Rules and Regulations approved and subsequently the Arbitration Mechanisms in place, the PCHC commenced its LIVE operations on 6 June 1980 and stood proud being the FIRST Automated Cheque Clearing House in Southeast Asia.

Initially programmed to computerize the clearing operations of the Metro Manila Area, PCHC went through the pains of growing but remained steadfast and determined to achieve its primary corporate objectives – to provide, maintain and render an effective, convenient, efficient, economical cheque clearing service to the participating banks.

The decade of the nineties marked the implementation of several milestone projects. Six (6) of the nearby Clearing Regions located within the 150 Km. radius from Manila were integrated into the Metro Manila MICR clearing exchange shortening the availability of funds for cheques presented amongst the combined clearing regions. Dishonored items were separately processed and prioritized to hasten verification and posting of returned cheques by the presenting banks.

With the advancement of technology and rapidly emerging trends towards electronic data interchange, PCHC readily assumed additional roles outside its primary mandate (Cheque Clearing Operations) without drastic changes in the organization and technology infrastructure. Trusted as neutral service bureau of the banks, PCHC expanded its operating outfit by implementing several electronic-based processing services. In the mid-90’s, the diskette exchange of foreign incoming remittances (FX Credit Clearing) was converted into an on-line delivery facility and re-branded as Philippine Domestic Dollar Transfer System (PDDTS Peso and now known as Electronic Peso Clearing System or EPCS for short) and PDDTS Dollar Netting. The Project Abstract Secure System (PASS) for Bureau of Customs which provided for electronic transmission of customs documents and customs duty collections was implemented. PCHC also operated an Inter-Bank Call Loan System (from trade matching to batch posting of the banks’ reserve position) to bridge the gap needed during the critical transition period into a real-time gross settlement.

Before the end of the decade, the Electronic Cheque Clearing System (ECCS) was introduced to complement the full computerization project of the Bangko Sentral ng Pilipinas (BSP) Accounting Department which required the early submission of clearing results . This move gave effect to the several changes in the timing and order of priority for the posting/updating of banks’ Demand Deposit Accounts (DDA’s) with the BSP.

With its mission of implementing a single clearing region for the entire country, PCHC proceeded to automate and took over the Inter-Regional Clearing Operations then fully managed by the BSP. The Out-Of-Town bank branches which used to operate under a mail-based exchange were also included as part of the Inter-Regional Clearing Exchange dramatically reducing the clearing period from 30-45 days to 5-7 days.

At the end of 2004, PCHC further expanded its operational coverage by integrating seven (7) additional clearing regions [one (1) in Luzon and six (6) regions from the Visayas and Mindanao area] into what is now known as the “Greater Manila Clearing Exchange”, thereby accelerating the velocity of funds from 5-6 days to a uniform of three (3) days within the covered regions.

To complete the expansion project, PCHC has initiated the groundworks for the conversion of the remaining BSP operated clearing regions into MICR/ECCS operation. PCHC’s clearing operations now encompass the entire country – Twenty-nine (29) Greater Manila/Integrated Regions and Forty (40) Regional “local” Exchange Centers.

PCHC now has a nationwide network of sixty-nine (69) defined clearing regions processing a daily average of 704,000 clearing items from more than 5,600 participating bank branches. Having addressed the needs of regional local exchanges, full conversion of inter-regional clearing operations into ECCS is now realized.

Fulfillment of the corporate status as exclusive cheque clearing service provider for the country fittingly highlights PCHC’s operational existence. Motivated by this responsibility, PCHC continues to reconfigure and retool its facilities for the coming years, focusing, in the immediate term, on flagship projects covering the upgrade from the traditional paper-based to “image-based” cheque clearing operation and enlarging the scope of utilization of the existing electronic-based payment system applications.

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