PCHC – THE FIRST 3 DECADES AND BEYOND
On July 29, 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 June 06, 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. The Project Application Secure System (PAS6) 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 since then encompassed the entire country – Twenty-nine (29) Greater Manila/Integrated Regions and Forty (40) Regional “local” Exchange Centers.
PCHC having a nationwide network of sixty-nine (69) defined clearing regions processed 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 was then 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 and upgraded its system 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.
After initially employing parallel systems during the 1st quarter of 2017 to accommodate member banks that are not yet ready, PCHC implemented full Check Image Clearing System (CICS) on the 2nd quarter of same year.
In the following year (2018), the total number of transactions that passed PCHC’s electronic channels reached 184 Million. This is the aggregate number of processed transactions in PESONet, PDDTS (Philippine Domestic Dollar Transfer System) and PAS6 (Payment Application Secure Version 5.0) which is 6.6 Million or 4.3% higher than what was recorded in 2017. Bulk of the volume emanated from Check Image Clearing System (CICS) at 176.67 Million and PESONet at 6.07 Million. On the other hand, PAS6 posted 1.12 Million while PDDTS end of day netting contributed 0.24 Million transactions.
2019 had exactly the same number of clearing days compared to 2018, making comparison in volume and values from the previous year realistic. For Check Clearing Volume, 2019 registered 257,277 items higher (0.15%) than those in the previous year. From 176.23 Million in 2018, the Volume went up to 176.49 Million in 2019. In terms of value, from Php41.45 Trillion in 2018, Clearing Value in 2019 rose to Php44.35 Trillion. PESONet transaction volume in 2018 was at 6 Million and doubled in 2019 to 12.1 Million. In terms of value, transactions of PESONet in 2019 rose to Php1.26 Trillion (56.7% higher) from Php805.65 Billion in 2018. PDDTS however decreased volume in 2019, from 122,536 transactions in 2018, it went down further to 114,765 in 2019. Similarly, PDDTS value sunk in 2019, from US$1.79 Billion in 2018, it went down further to US$1.76 Billion in 2019. PAS6 transaction count in 2019 rose to 1.15 Million transactions from 1.2 Million in 2018. In terms of value, Collection in 2019 rose to Php606.7 Billion (7.3% higher) from Php564.6 Billion in 2018.