BUSINESS
Advocates Philippines
BSP Mandates Digital Payments For Large Cash Transactions
Photo credit: BSP
The Bangko Sentral ng Pilipinas (BSP) is implementing new measures to combat money laundering and other financial risks associated with the use of cash. Under the new Circular No. 1218, series of 2025, the central bank now requires that large-value transactions be conducted through traceable, non-cash channels.
New Rules for Payments
Effective immediately, any transaction involving ₱500,000.00 or more—or its equivalent in foreign currency—can no longer be settled with physical cash. Instead, these payments must be made using traceable methods such as checks, online fund transfers, direct deposits, or digital payments. This limit applies to a single transaction or a series of transactions that total this amount within one banking day. The goal is to create a digital trail for funds that were previously untraceable.
Enhanced Scrutiny for Withdrawals
For those needing to withdraw more than the ₱500,000.00 limit, a more rigorous process is now in place. BSP-Supervised Financial Institutions (BSFIs) are mandated to conduct enhanced due diligence (EDD) on these requests. This means financial institutions will closely examine the transaction's purpose and the customer's profile. If the withdrawal is deemed suspicious, the BSFI is required to file a report. However, if the customer provides proper documentation proving a legitimate business purpose for the large cash amount, the withdrawal may still be approved.
BSFIs Can Set Lower Limits
To further manage risk, the BSP is allowing BSFIs to set even lower limits for large cash transactions based on their own risk assessments and their customers' financial profiles. This gives financial institutions the flexibility to implement stricter controls as they see fit. This new regulation is a critical step in the BSP's ongoing efforts to strengthen the integrity of the financial system and ensure its resilience against illicit activities.
New Rules for Payments
Effective immediately, any transaction involving ₱500,000.00 or more—or its equivalent in foreign currency—can no longer be settled with physical cash. Instead, these payments must be made using traceable methods such as checks, online fund transfers, direct deposits, or digital payments. This limit applies to a single transaction or a series of transactions that total this amount within one banking day. The goal is to create a digital trail for funds that were previously untraceable.
Enhanced Scrutiny for Withdrawals
For those needing to withdraw more than the ₱500,000.00 limit, a more rigorous process is now in place. BSP-Supervised Financial Institutions (BSFIs) are mandated to conduct enhanced due diligence (EDD) on these requests. This means financial institutions will closely examine the transaction's purpose and the customer's profile. If the withdrawal is deemed suspicious, the BSFI is required to file a report. However, if the customer provides proper documentation proving a legitimate business purpose for the large cash amount, the withdrawal may still be approved.
BSFIs Can Set Lower Limits
To further manage risk, the BSP is allowing BSFIs to set even lower limits for large cash transactions based on their own risk assessments and their customers' financial profiles. This gives financial institutions the flexibility to implement stricter controls as they see fit. This new regulation is a critical step in the BSP's ongoing efforts to strengthen the integrity of the financial system and ensure its resilience against illicit activities.
Sep 19, 2025
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