On the initiative of the Bankers Association of the Philippines (BAP) to expedite the clearing of US Dollar Drafts representing dollar remitted by Filipino Overseas Contract Workers (OCW) to local beneficiaries, the FX Clearing and Settlement System was established and began operation on October 1, 1991.

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The FX Clearing and Settlement System effects the transfer of funds via direct credit to the bank accounts of beneficiaries without the need of “cutting” a Bank Draft or Manager’s Check. Instead, remittance advices are encoded onto (PC) diskettes by participating banks in accordance to an adopted standard format and sent to PCHC for the clearing process.

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In 1994, the diskette method of funds transfer was converted into an electronic mode thus the birth of the Philippine Domestic Dollar Transfer System (PDDTS). The participating banks send domestic Interbank US Dollar Transfers thru a settlement bank in either of two (2) ways or both as they deem convenient:

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1. Gross Settlement Real Time (GSRT or Intra-day).

• GSRT transfer instructions are sent directly by banks to the settlement bank.

2. End-of-Day (EOD Netting) – a system that supports bulk, recurring and less time sensitive payments.

• Participating banks transmit transactions to PCHC by batches

• Following the prescribed cut-off time for transmissions, a netting process will then be performed by PCHC.

• Net clearing positions are downloaded by the settlement banks for posting to the participant banks’ respective US Dollar deposit accounts.

• The banks’ clearing results and inward data files and reports are also generated by PCHC and made available to the participants for downloading.

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In 2015, BAP renewed the appointment of its current settlement bank as the exclusive Settlement/Depository Bank for PDDTS Transactions. This time however, another entity the Philippine Central Depository Inc. (PCD) was designated as the service provider for the GSRT while PCHC retained its role as service provider for the End-of-Day Netting Method. This set-up has been further renewed in 2003 and again in 2005.