With no end in sight for the use of the paper check as a payment instrument, banking institutions which are constantly seeking better, speedier, and more cost-effective processes for the delivery of their services to their customers, cannot disregard the benefits that check truncation provides.
Banks play a vital role in providing payment services to “close the loop” in any business transaction. Whether it be a trade payment between buyer and seller or a simple transfer instruction to credit a personal account, there has to be a facility to clear payment instructions within a large community of banks.
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.
The Authorized Agent Bank (AABs) represented by the Bankers Association of the Philippines (BAP) accepted the obligation of collecting customs duties and taxes and the responsibility to remit accurately and timely to the Government Treasury all such collections.