Settlement process – Philippines


Settlement cycles



Listed corporate bonds:

As per contract note (or by agreement between the parties)

Unlisted corporate bonds:

Fully negotiable between the parties

Government bonds:

Standard is T+1 but can be extended up to T+3 as agreed between broker/dealer and client

Settlement flows

All times are local Philippines time (PHT) otherwise stated.

Primary market


In the primary market only a Government Securities Eligible Dealer (GSED) is able to participate. For Treasury Bills, trading is conducted through auctions, which are held on a Monday with cash settlement on Wednesday. For Fixed Rate Treasury Notes offerings, auctions are held on a Tuesday for settlement Thursday. Successful GSEDs have their securities accounts credited on settlement date, which will be the issue date of the security, upon cash settlement. Payment is settled through a regular demand deposit account (RDDA) maintained with BSP by GSEDs. Maturing government securities are also settled through the GSED’s RDDA account with BSP.

Bids are submitted and cannot be withdrawn or cancelled after 13:00 PHT. Should the GSED succeed with its bid, payment is irrevocable. On settlement day, the BTR debits the GSED's cash account with the BSP and credits the securities into the GSED's securities account in NRoSS.

Although the BTR does not extend credit to participants, if there are insufficient funds, the debit is automatically applied against the GSED's credit facility with BSP.


In the primary market, as a means of raising capital, a private company issues and sells new shares to the investing public for the first time. This is generally called an IPO (Initial Public Offering). IPOs are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded. As companies grow, they would need more capital to finance increasing requirements. To raise such funds, some companies opt to undergo an IPO.

In the Philippines, companies that do an IPO are required to list on the stock exchange. Companies also need to have an underwriter, which are investment bankers who provide placement power as well as valuation services, among others. They also take risk by, in effect, purchasing all the shares to be floated at a discounted price and reselling these to the general public at a higher price. Underwriters also help the company prepare an offering prospectus, a detailed analysis of the company's financial history, its products and services, and management's background and experience.

A company that intends to conduct a public offer must comply with the prospectus rule of the Securities and Exchange Commission (SEC). The rule provides for the specific contents/format of the prospectus of the offer. On the prospectus delivery rule, prior to the actual offer, the issuer is required to provide a red herring prospectus to interested parties during the book-building process. The issuer must deliver/provide the final prospectus after their registration statement with the SEC has been effected, while the public offer must commence within two trading days after that.

Secondary market


The secondary market settlement cycle is officially T+1.

Trades are entered by both parties through an electronic trading platform linked with NRoSS. The close of trading is at 12:00 PHT and GSEDs then have until 15:30 PHT to input and transmit their transactions to NRoSS which then verifies that there are sufficient securities in the seller's securities account. Trades may also be settled manually by using properly filled standard format Certificate of Sale/Certificate of Purchase which are sent through facsimile no later than 15:30 PHT. If there are insufficient securities, the trade will be put on hold or queued by NRoSS until 15:30 PHT while the securities are obtained to enable the trade to settle. If manually prepared forms are used for settlement, the original documents are sent to the BTR no later than the next business day.

Settlement of government securities traded by GSEDs takes place on a trade-for-trade basis in real time between 09:00 PHT and 15:30 PHT with funds settling on a real time gross debit/credit basis in BSP also by 15:30 PHT. With a link established with the Central Bank's PhilPaSSPlus system, the government securities may be temporarily earmarked up until 15:30 PHT at the latest while the cash is checked and transferred, following which the settlement of the securities will be finalised. Any trades that remain unsettled at that stage will be cancelled. This has enabled true delivery versus payment for this segment of the market.


On-exchange equities transactions

At the end of the trading session on trade date and after all corrections have been entered, the matched trade data captured in the PSE System are electronically forwarded to SCCP's C&S system. Also, PDTC sends securities balances to SCCP at the start of day as they relate to PSE-traded securities transfers. The C&S system then performs multilateral netting and provides a net receipt or net delivery security position for each clearing member. At the same time, all cash debits or credits are also netted into a single net cash obligation or entitlement for each clearing member.

Securities for delivery are lodged at PDTC and are subsequently transferred to the brokers' securities settlement account in C&S. (Settlement via SCCP's C&S is compulsory for trades executed at the PSE among PSE member-brokers). Meanwhile, cash obligations must be deposited with one of the ten (10) settlement banks (BDO Unibank, Rizal Commercial Banking Corporation, Metrobank, Deutsche Bank, HSBC, Maybank Philippines, Unionbank, Asia United Bank, EastWest Bank and China Bank) by 12:00 PHT on SD.

On settlement date, the C&S system first settles all cash and security delivery instructions before the receipt instructions. The processing of these trades occurs during a batch run from 12:00 PHT until 13:00 PHT on T+1.

The settlement deadline of 12:00 PHT on T+2 is strictly enforced by the SCCP and fines and penalties are imposed on clearing members in the event of late settlements.

Clearing members generally have existing credit lines with the settlement banks. For clearing members paying through cheques, the cheques are given same-day value. The settlement banks guarantee the figures uploaded to C&S; thus, trades that have been settled cannot be reversed due to lack of funds.

Clearing members also have the option to settle cash obligations through RTGS using the PhilPaSSPlus system of the Bangko Sentral ng Pilipinas (BSP).

Cash shortages shall be funded using the Clearing and Trade Guaranty Fund (CTGF) or any credit facilities maintained with the settlement banks by 13:15 PHT. By 13:30 PHT, the C&S system will instruct the settlement banks to credit proceeds to the respective cash settlement accounts of the receiving clearing members. SCCP will withhold the equivalent securities that are owed to the defaulting clearing member, and will attempt to sell the securities if the defaulting clearing member is not able to pay by 09:15 PHT on SD+1, in order to recover the cash that was not paid to the selling clearing member. In case of a securities fail, SCCP will withhold the equivalent cash amount that would have been paid to the defaulting clearing member and will attempt to buy the securities in the market if the defaulting clearing member is not able to deliver by 09:15 PHT of SD+1.

Once the batch settlement run has been completed and the file has been sent to the banks, title is final and irrevocable.

Off-exchange equities transactions (broker-to-custodian, broker-to-other depository participant)

The movements of cash and securities for off-exchange transactions do not adhere to DVP principles. Arrangements for transfer vary depending on the agreement between the counterparties. The system is available for settlement from 08:00 PHT to 19:00 PHT.

The settlement of broker-custodian transactions is a two-step process, the payment of cash and then the delivery of securities. Custodians generally require brokers to maintain cash accounts with them which are debited before securities to be sold are released. Securities to be sold have to be moved to the broker's account no later than 12:00 PHT on SD. For purchases, custodians only pay the brokers when the securities are delivered to them after the SCCP settlement window.

There is also a pre-matching facility available for depository participants. Both delivering and receiving parties upload/input their instructions into the system. By default, delivery trades are not on automatic release. Trades are released once the delivering party has ascertained sufficiency of shares and after receipt of payment from receiving party.

Note: Clearstream Banking does not accept equities and fixed income over-the-counter (OTC) transactions for settlement.



Broker payments are made via a trade settlement report instructing BSP to debit/credit their Regular Demand Deposit Account (RDDA) at the broker's bank after cut-off time. GSEDs authorise BTR/BSP to debit/credit their accounts through an auto-debit/auto-credit authority submitted during membership enrolment. Payment is contingent on the settlement of the securities and occurs by 15:30 PHT; unwinding is not allowed. GSEDs have the option of:

  • Funding their RDDA before cut-off time; or
  • Drawing against any available overnight credit line with BSP which shall be deemed drawn whenever the GSED's RDDA is negative or insufficient to settle a trade.

Cash settlement of non-GSEDs is done via RTGS and has to be received before 15:30 PHT. For trades between GSEDs, the payments are settled directly using their RDDA account with BSP. Banks and financial institutions are responsible for ensuring that their cash position is sufficient for their trading requirements.

The link with PhilPaSSPlus facilitates the debit and credit of RDDA accounts at BSP via a messaging system, enabling real time DVP settlement. Payment arrangements for non-GSEDs remain unchanged.


Payment for PSE equities trades is generally via manager's cheque or cashier's cheque. However, same-day value is given to the cheque deposit provided the broker has sufficient credit lines with the Settlement Bank. After the batch settlement run, the net debit/credit file is sent electronically by C&S to the settlement banks who debit/credit the brokers' cash accounts in their own systems.

For broker-custodian purchases, buying brokers transfer the bought securities to the custodian account at the depository after the SCCP settlement window, after which the custodian will release payment by crediting the broker's cash account with the custodian or transferring money via the RTGS system to the broker's account in another bank.

The SCCP has asked its clearing members/brokers to use the RTGS system (PhilPaSSPlus) to replace the use of manager's cheques to fund settlement accounts.

Payment for PDEx fixed income trades is via the RTGS system of the central bank for fixed income trading participants which are banks and through the designated settlement bank accounts of non-bank trading participants and investors. All PDEx trades settle on a DvP Model 1 mode.

Partial settlement

Partial settlements are only allowed in the Philippines for non-exchange trades and by agreement between the parties. Partial settlements are not allowed for exchange trades.

Central counterparty

The SCCP acts as central counterparty for exchange trades.

Same-day turnaround

Same day turnarounds are permitted for foreign investors in the Philippines but there are practical difficulties posed by cheque clearing requirements. Custodians ensure that funds are in place when undertaking turnaround trades.

It is important that the instructions (both delivery and receipt) are received at the same time prior to settlement date to facilitate the pre-matching process. Any problem encountered on any leg of the trade may result in the failure of the turnaround trade. It is crucial for trade instructions to be in order including availability of funds and/or shares and other factors that would contribute to the settlement of the trade.

Free of payment (FOP) transfers

There are no restrictions on FOP transfers. However, instructions for FOP transactions must indicate whether there has been a change in beneficial ownership.

Change of Beneficial Owner (CBO) FOP transactions are subject to documentary stamp tax (DST) of PHP 1.50 for every PHP 200.00 or fractional part of the par value and capital gains tax (CGT) of 15% for net gains. Both the buyer (payment of DST) and seller (payment of CGT) must present proof of payment of taxes to the Bureau of Internal Revenue (BIR) before the transaction can be settled.

On-exchange transactions are, according to the DST Law or Republic Act 9648, exempt from DST and clients would pay the stock transaction tax (also known as sales tax) of 0.6% in place of the CGT. For off-exchange transactions, the taxes must be paid and filed by the actual buyer/seller.

For the sale/disposal of shares listed and traded through the local stock exchange, a stock transaction tax of 0.6% of the gross selling price or gross value in money of the shares of stock sold is imposed.

We recommend that clients appoint a local tax consultant for the computation and remittance of taxes to the BIR. The local tax counsel assists in the payment of both DST and CGT, submission of the deed of sale and other supporting documents to the BIR, and obtaining the tax clearance certificate from the BIR.

Settlement of debt securities

Fixed income securities are in scripless form. Transfers to/from the depository for purposes of settlement are done within the same day and in real-time mode for government securities and for private debt securities for which PDTC is the registry.

Settlement risk

Failed trades within the Philippines market are infrequent since the penalties imposed by the SCCP on the defaulting broker are severe. If the defaulting broker is unable to deliver the securities or pay its cash obligation by 09:15 on SD+1, the trading and clearing rights of the defaulting broker will be immediately suspended and the suspension will be posted on the PSE website and on both trading floors. Repeated violations are punishable with fines and the SCCP may terminate the clearing membership of the defaulting broker.

There is a fails management arrangement in place with the SCCP, whereby the SCCP assumes the role of central counterparty to all PSE transactions. Under this role, the SCCP guarantees the settlement of each trade. In the event of a cash fail, the SCCP would advance the corresponding payment utilising funds from any credit facility or the Clearing and Trade Guarantee Fund (CTGF). The SCCP would then hold in escrow the number of securities of the defaulting clearing members equal to or greater than the amount of the cash fail.


In the event of a security fail, SCCP will hold:

  • The defaulting member's receivable cash – if the defaulting member has a net money entitlement; and/or
  • Any of the defaulting member's receivable securities as SCCP deems appropriate – if the defaulting member has no money entitlement or is less than the amount of the Security fail; wherein the value of the shares will be equal to or greater than the amount of the Security fail.

In the event that the net selling clearing member fails to deliver the securities by 09:15 PHT SD+1 and a borrowing of the securities had not been successfully executed with a potential lender:

  • At 09:15 PHT SD+1, SCCP will suspend the defaulting clearing member and undertake a buy-in procedure in order to acquire the securities that need to be delivered to the affected clearing member(s).
  • SCCP will automatically execute a buy-in at 10:00 PHT through a designated trading participant.
  • All expenses or costs arising from the buy-in transaction will be charged to the defaulting clearing member in addition to the penalties stated in the Sanction Table.
  • The buy-in transaction/s will be entered into the PSEtrade XTS system as a normal trade which will undergo regular settlement wherein settlement date shall take effect on T+2.

Based on the Revised Fails Management Rules of SCCP approved in July 2012, SCCP may accept cash collateral no later than 17:00 PHT on SD where the broker will be given until 10:00 PHT on SD+1 to deliver the securities otherwise face suspension. The cash collateral may be used by SCCP to purchase securities in its buy-in process.


In the event that a buyer fails to meet the payment deadline for settlement of his trade, the SCCP will advance the corresponding amount (payment) to the selling counterparty.

  • SCCP will choose from any of the defaulting clearing member's security entitlements and cancel any pending security transfer instructions by the defaulting clearing member from the receive to the deposit accounts for such securities.
  • SCCP will transfer and hold in its escrow account the number of shares of said security whose equivalent market amount is equal to or greater than the amount of the cash fail, until payment has been made.
  • If no payment is received by 09:15 PHT on SD+1, SCCP will suspend the defaulting clearing member and undertake a sell-out procedure on the shares. SCCP will automatically execute a sell-out at 10:00 PHT through a designated trading participant.
  • All penalties and charges such as applicable taxes and transaction costs and penalties for the use of the Clearing and Trade Guarantee Fund (CTGF) will be deducted from the proceeds of the sale in order to liquidate the account of the defaulting clearing member.
  • The sell-out transaction/s will be entered into the PSEtrade XTS system as a normal trade which shall undergo regular settlement wherein settlement date shall take effect on T+2.

Guarantee funds

The BTR does not guarantee settlement of trades. There is no clearing fund nor collateral held. For PSE transactions, the SCCP manages the Clearing and Trade Guarantee Fund (CTGF). The purpose of the fund is to enable the SCCP to complete any failed trade. The size of the fund is around PHP 1.600 bn approximately USD 29.2 mn) as of 31 December 2023. It is composed of:

  • Seed money contribution from PSE;
  • Contribution from clearing members;
  • Retained earnings allocated by SCCP for the CTGF; and
  • Interest income from the investment of the clearing fund.

The guarantee fund is maintained and administered by SCCP. SCCP's obligation, however, is limited to the amount of the CTGF. In the event that the CTGF is insufficient, SCCP shall remain liable for the outstanding trades but payment shall be made as and when and to the extent that funds are subsequently available. In respect of securities obligation, SCCP shall make money compensation if it deems that it is not possible or reasonably practical to deliver the securities.

Clearing members contribute 1/500 of 1% of the clearing members' total value of transactions for the month, computed net of block sales and cross transactions. New clearing members and trading participants who are resuming operations after having voluntarily suspended their operations are subject to collection by SCCP of an initial contribution to the clearing fund following a certain formula found in the CTGF Rules.

With effect from 1 August 2018, contributions to the CTGF have become refundable as trade-related assets upon cessation of business of the clearing member and/or upon termination of its membership with SCCP, provided that all liabilities of such clearing member owing to the SCCP at the time of termination, whether actual or contingent, shall have been satisfied or paid in full, and shall take into account any pending and previous applications of the clearing fund at the time of such termination. The return of contributions shall be made after a reasonable processing time. The refundability of the CTGF applies only to all current and actively operating PSE trading participants/clearing members of the SCCP as of 2 August 2018.

To complement the CTGF, the SCCP employs a full collateralisation of marked-to-market exposures for all clearing members. Additionally, SCCP has proposed to implement margin requirements in lieu of obtaining a default guarantee product. The proposed rules are with the SEC for approval.

The need for a guarantee over lodgements is not required because participant accounts are only credited after the securities are verified by the registrars.

Other guarantee funds

The Securities Investors Protection Fund Inc. (SIPFI) is the organisation that manages a fund contributed by member brokers of the Philippine Stock Exchange (PSE). It was created to protect investors against losses in case of fraud, failure or insolvency of a member broker/dealer. Each member contributes an initial fee of PHP 10,000 plus a monthly due equivalent to 1/1000 of 1% of its gross monthly volume. The fund is available only to clients of securities firms forced to liquidate. Whenever possible, all client accounts of a failed firm will be transferred to another member firm. Where transfer is not feasible, the client will receive the following:

  • Securities registered in their name and identified as belonging to them.
  • On a pro-rata basis, all remaining cash and securities of clients, individual ownership of which has not been established.
  • Any remaining assets after payment of liquidation expenses on a pro-rata basis with other creditors. The fund will be available to satisfy the remaining claims of each client for a maximum amount of PHP 100,000.


Registration details by instrument type

EquitiesFixed incomeMoney markets
Registration period (Estimated Average)
Book entry.
Physical securities: 2 to 4 weeks
Government bonds: Book entry
Corporate bonds: 2 to 4 weeks

Not applicable

Sales while out for registration

Securities not available for sale.

Government bonds: Not applicable
Corporate bonds: Not available for sale

Not applicable

When new holder is eligible for rights

Sellers entitled to rights/dividends on Trade Date.

Not applicable

Not applicable

Registration period

Securities held at PDTC are registered in the name of its nominee, PCD Nominee Corporation (PCNC) and do not need to be registered upon transfer while held in PDTC. Shares can be uplifted from PDTC and held in physical form in the name of the investor, the custodian's nominee name or in street name. The period to uplift and register the securities takes about 2-4 weeks. During this period the shares can continue to be traded but cannot settle. The lodgement process into PDTC takes about four business days during which time the shares are not available for trading.

For unlisted shares, name registration is required. It is common that shares be registered under the sub-custodian's nominee name. The investor may alternatively register the shares in their own name. The sub-custodian bank may only act on behalf of a client for corporate actions if shares are registered under their nominee name.

Unlisted shares

Name registration is required. The shares may be registered under the client/investor's name. The issuer or its transfer agent will coordinate directly with the shareholder on record as indicated on the stock certificate for any corporate actions.

Transfer stamp duty

Stamp duty is applicable for off-exchange equities transactions only at PHP 1.50 per PHP 200 value. Stamp duty is not applicable for on-exchange equities, fixed income or money markets transactions.

Payment systems

A number of payment systems operate in the Philippines including:

  • Electronic Cheque Clearing System (ECCS);
  • Philippine EFT System Operations Network (PESONet);
  • Philippine Domestic Dollar Transfer System (PDDTS);
  • PDS Settlement Highway (PSH);
  • Philippine Payments and Settlements System (PhilPaSS);
  • Check Image Clearing System (CICS).

Philippine Payment and Settlement System (PhilPaSSPlus)

Bangko Sentral ng Pilipinas (BSP) launched its ISO 20022-capable Philippine Peso (PHP) real-time gross settlement (RTGS) platform named PhilPaSSPlus in July 2021. 

In PhilPaSSPlus, processing and final settlement of funds transfer instructions take place continuously (in real time). Transfers are settled individually. The system processes final settlement instructions continuously rather than periodically at pre-specified times provided that a sending bank has sufficient balances or credit. The settlement process is based on real-time transfer of central bank money. The system is available to participants until 17:45 PHT.

Note: The Bureau of the Treasury has established a link to PhilPaSSPlus that allows for real-time payments on government securities traded in the secondary market on a real DvP basis. The choice to settle via RTGS or via DvP of nRoSS depends on the counterparty. BTr’s cut-off for against payment trades is at 16:00 PHT while the cut-off for free of payment trades is at 18:00 PHT. 


Cheque is considered a non-cash payment instruction given in negotiable paper form by private individuals or banks, to be exchanged between banks through the Philippine Clearing House Corporation (PCHC) and BSP clearing unit offices for processing and settlement through the demand accounts of banks and financial institutions that are maintained with the BSP. Local cheque clearing cut-off is at 12:30 PHT. The PCHC transfers funds via net settlement at end of trading at 16:30 PHT. The Check Image Clearing System (CICS), implemented by the central bank, allows the electronic clearing of cheques via electronic presentment. Under CICS, only the digital images of cheques and their electronic payment information are transmitted to the paying bank. This allows funds to be available next day, as opposed to the previous 3-day clearing.

The Philippine Domestic-Dollar Transfer System (PDDTS)

PDDTS allows online, real-time gross settlement of domestic interbank USD transfer and third party account-to-account USD transfers. In addition, it provides a facility for online inquiry and settlement of foreign exchange transactions, where the PDDTS participants enter interbank USD and PHP transfer instruction in a single screen. The USD leg is settled via PDDTS while the Peso leg is transmitted to PhilPaSSPlus for settlement by the BSP. The system is available to participants until 16:00 PHT. Transfer of funds can either be via real time gross settlement or via net settlement at end of trading.

Philippine EFT System Operations Network (PESONet)

PESONet is an interbank account-to-account fund transfer system for bulk, recurring, non-time sensitive payments and collections. It is operated by the PCHC.

Check Image Clearing System (CICS)

CICS allows the electronic clearing of checks via electronic presentment. Only the digital images of checks and their electronic payment information are needed to be transmitted to the paying bank, allowing funds to be available next day.

National Retail Payment System (NRPS)

In April 2017, industry participants, including both banks and non-bank Electronic Money Issuers (EMI), signed the Charter of the Payment System Management Body (PSMB), and committed to form two priority Automated Clearing Houses (ACH) in 2017. The primary role of the PSMB is the formulation, issuance and enforcement of governance framework comprising of principles, policies, rules and guidelines on clearing “off us” transactions, including sound risk management, non-discriminatory membership and efficient dispute resolution. Moreover, PSMB governance shall cover all payment clearing processes. No bilateral clearing between participants shall be allowed so as to gain visibility of all clearing results.

The two priority ACHs are PESONet and InstaPay:

  • PESONet is a batch electronic fund transfer credit ACH launched on 8 November 2017. It is used to transfer funds and recurring payments electronically from the sender’s accounts maintained in BSP-supervised financial institution (BSFI), such as banks and other non-bank electronic money issuers (NB EMI), to corresponding recipient accounts in other BSFIs. Funds can be made available to the recipient account(s) within the same banking day or immediately upon clearing. Payees receive the full value of the funds transferred and shall not pay for such electronic credit into their accounts.
  • InstaPay provides real-time electronic fund transfers for low value payments. It allows payers to send instructions to their financial institutions to irrevocably transfer funds held in their account to the account of a payee, who receives the full value immediately. The service is available 24/7 offering immediate credit to the beneficiary’s account. InstaPay was launched on 23 April 2018.

ISO 20022 Standard

With the aim to modernise the financial market infrastructures in the Philippines, the Bangko Sentral ng Pilipinas (BSP) encourages financial firms under its supervision to adopt ISO 20022 on retail payment systems, as well as on the real-time gross settlement system (RTGS). The BSP will also be renewing its legacy systems through some enhancements.

Additionally, the BSP is undertaking initiatives to further enhance the efficiency and interoperability of the domestic retail payments systems and the country's real-time gross settlement system (RTGS). In line with this goal, the BSP adopted ISO 20022 and incorporated it as one of the features of the country's new real-time gross settlement system (named PhilPaSSPlus), which was launched in July 2021.