Philippines Market Profile

Corporate Treasury & Cash Management in the Philippines

Philippines Market Profile

Corporate Treasury & Cash Management in the Philippines

At a glance

 About the Philippines 

The Philippines is one of the fastest growing economies in Southeast Asia and is expected to retain this status in the coming years. It is the third largest economy in the Association of Southeast Asian Nations (ASEAN) and the fifth largest emerging economy in Asia, according to the International Monetary Fund (IMF). Its credit ratings have been on a steady rise over the years.  

Open regulation has allowed 100% foreign ownership in almost all sectors, with companies in the Special Economic Zone enjoying low tax rates. Low business costs and natural resources in the Philippines have further attracted investors.  

The Philippines boasts one of the highest literacy rates in Asia and has one of the world's largest English-speaking populations, providing skilled labour to support increasing investment and entrepreneurial opportunities.  

Corporate Treasury in the Philippines 

The Philippines is one of the fastest-growing economies in Southeast Asia. In this section, we highlight some of the key factors relevant to treasury and cash management.  

 Financial Market Development  

  • Manila is ranked 79th in the 2021 Global Financial Centres Index by Z/Yen Group, 27 places higher than in 2020.  
  • The Philippines offers good business infrastructure, an educated, English-speaking, highly competent and cost-effective workforce, and a sound legal environment.  
  • The Philippines has foreign-exchange controls. Companies must submit supporting documents to the central bank before purchasing foreign exchange above USD1 million.  

 Sophistication of Banking Systems  

  • The Philippines has 46 universal and commercial banks, of which three are government-owned and 26 are branches or subsidiaries of foreign banks. A further 11 foreign banks have representative offices.  
  • The Philippines' debt market consists mainly of short-term and long-term government bonds. The corporate bond market is small, although it is growing rapidly. Outstanding local currency bonds stood at PHP9,122 billion at the end of March 2021.   

Regulatory Bodies  

  • The banking industry is regulated by Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines. Regulations are in line with international standards. BSP also regulates foreign-exchange controls.  


  • The corporate income tax rate is 25%.  
  • Resident companies are taxed on worldwide income. Foreign companies with permanent establishments in the Philippines are generally taxed on income that is received or generated in the Philippines. 
  • A company is considered a resident if it is incorporated in the Philippines or licensed to carry out business there. 
  • A Philippine branch’s after-tax profits remitted or deemed remitted to its foreign head office are subject to an additional 15% branch remittance tax (except for those activities registered with the Philippines Economic Zone Authority and other companies within special economic zones).  
  • The standard rate for Value Added Tax (VAT) is 12%, with certain transactions being zero-rated or exempt.  
  • For non-resident companies, withholding tax rates are 15% or 25% on dividends and 20% on interest if no tax treaty is in place. Withholding tax ranges from 5% to 25% for dividends and is 10%, 12.5% or 15% on interest, where a treaty is in place and the non-resident company can provide a Certificate of Residence.  
  • Documentary stamp duty is payable on a number of transactions, including certain debt instruments. Some of the instruments are subject to ad volarem whilst others are fixed in nature.  
  • Interest income, depending on the source, is subject to a final tax of 10%, 15% or 20%, and such interest income will not be included in the corporate income tax returns.  
  • Allowable deductions for interest expenses are reduced by an amount equal to 20% of the interest income that is subject to final tax. There are no thin capitalisation rules in the Philippines.  
  • Tax incentives are available for export companies and those located in special economic zones, including exemption from corporate income tax for specific periods of time if certain conditions are met.  
  • Regional operating headquarters of multinational companies that derive income in the Philippines are subject to a reduced corporate income tax rate of 10% on their taxable income, although this will rise to 25% from 1 January 2022.  
  • Regional or area headquarters of multinational companies that do not derive income from the Philippines and act as supervisory, communication and coordinating centres for their overseas-related companies are not subject to corporate income tax.  
  • The Philippines has tax treaties with more than 40 countries and territories.  

  Benefits for Shared Service Centres 

  • The Philippines is located in the heart of the fast-growing Southeast Asia region. 
  • The country's low-cost, highly skilled and competent English-speaking workforce makes it a popular base for Shared Services Centres. 
  • The Philippines is a member of the Asian Payment Network, a common payment settlement platform within Asia Pacific. 
  • Cash concentration is permitted between resident and non-resident companies but is not widely practiced due to reporting requirements and cross-border transfer limits. 
  • Notional pooling is not permitted in the Philippines.

Bank Accounts 

  • Residents: May hold foreign currency accounts domestically and overseas (provided the source must be from outside Philippines. If the source is from within Philippines and it is in excess of US$60 million, it will be subject to approval from the Central Bank). However, residents are not permitted to hold domestic currency accounts overseas, although they are freely convertible to foreign currency within the provisions of the foreign exchange controls. 
  • Non-residents: May hold foreign and domestic currency accounts on the condition that domestic currency accounts are used for foreign currency remittances, domestic currency income and/or income from assets held in the Philippines; in order for domestic currency accounts to be freely convertible to foreign currency, funds are from tourists or balikbayan (returning Filipino citizens) that satisfy foreign-currency control rules.   
  • Interest: Available to current accounts and short-term deposit accounts.  

Legal and Regulatory 

  • BSP oversees the banking sector and administers foreign-exchange controls. Payment and settlement systems are supervised by BSP’s Core Information Technology Sub-Group of the Supervision and Examination Sector.  
  • The Philippines is a member of ASEAN and is therefore subject to its financial multilateral arrangements. The PHP is only permitted for use in international transactions within the ASEAN.  
  • There are anti-money-laundering and counterterrorism-financing regulations in place.  
  • Authorisation is required to bring in or take out PHP50,000 (in pesos) or more, in cash or electronically. Foreign currency equivalent to USD10,000 and above brought in or out of the Philippines has to be declared to Customs.  
  • A financial intelligence unit has been set up, the Anti-Money Laundering Council (AMLC), which is a member of the Egmont Group.  

Payment Systems   


(Philippine Payment and Settlement System)  
  • Philippines' Real-Time Gross Settlement (RTGS) system  
  • Operated by the BSP through its Payments and Settlements Office (PSO).  
  • Processes high-value and urgent PHP interbank transactions and remittances by overseas nationals through PhilPaSS-REMIT in real time and with immediate finality.  
  • 175 participants   
  • Activates final settlement of participants' net balances originating from the EPCS (see below).  
  • Final settlement takes place across the participant banks' correspondent accounts held at the BSP.  


(Philippine Domestic-Dollar Transfer System) 

Online RTGS system  
  • Operated by the Philippine Central Depository (PCD) and the Philippine Clearing House Corporation (PCHC), with Citibank Philippines as the settlement bank.  
  • High-value USD interbank transfers are done through the gross settlement real time (GSRT) system, operated by the PCD.  
  • Low-value USD interbank transfers are done through the PDDTS' end-of-day (EOD) netting facility, operated by the PCHC.  
  • PDDTS settles the USD part of the transaction and PhilPaSS settles the PHP part of the transaction for settlement through the BSP.  
  • 48 participants.  


(Electronic Peso Clearing and Settlement System)  

Low-value interbank PHP transfer system  
  • Operated by the PCHC.  
  • 76 participants.  
  • Interbank transactions are processed and settled with funds available next working day. Recipient bank may impose a fee.   
  • Final settlement is done across participants' accounts held at the BSP through PhilPaSS.  


(Electronic Check Clearing System) 

Multilateral net settlement system  
  • Operated by the PCHC, with settlement done across participants' accounts held at the BSP through PhilPaSS.  
  • System operates through 36 integrated clearing regions in the Greater Manila Area and 47 regional clearing units, with all financial institutions having to participate in the ECCS.  
  • Processes cheque and paper-based payments the next working day.  
  • Processes Magnetic Ink Character Recognition (MICR)-encoded cheques electronically.   
  • Cheques are physically exchanged at the same time as the electronic exchange of information.  


Automated cheque clearing system  
  • Operated by PCHC.  
  • 70 participants.  
  • Processes truncated images of cheques or electronic payment information.  
  • Settlement on next-day basis through PhilPaSS.  


Electronic funds transfer credit payment system  
  • Operated by BSP.  
  • 82 participants (BSP supervised financial institutions [BSFIs]).  
  • The first automated clearing house under the National Retail Payment System (NRPS) framework.  
  • Processes credit transfers with participating institutions on the same day or upon clearing, 24/7.   


Real-time electronic fund transfer (EFT) system  
  • Operated by BSP and launched in 2018 as part of the National Retail Payment System.  
  • 52 participants.  
  • Processes transactions of a maximum of PHP50,000 per day, with no limitation, in real time, 24/7.  
  • No charge to recipient, but a cost may be incurred by the sender.  
  • Sender and recipient must have accounts with participating institutions.  


Payment Instruments 

Credit Transfers 

  • Available as paper-based or automated transfers, although automated transactions are not common.  
  • High-value and urgent transfers are settled on the same day.  
  • Low-value and non-urgent transfers are settled on the next business day. They include payroll, supplier and third-party payments.  

Direct Debits (auto debits) 

  • Available for low-value, regular payments such as utility bills.  
  • Settled and cleared in three business days.  

Card Payments 

  • Increasing in popularity as a form of cashless payment, although card payment facilities may be limited outside of the major cities and only a small proportion of the population is eligible for a credit or debit card.  
  • The main card networks are Visa, MasterCard, Diners Club and American Express, which are serviced by a variety of card providers. All cards are Europay, MasterCard and Visa (EMV)-compliant.  
  • Automated teller machine (ATM) cards are linked to deposit accounts and are also used as debit cards. Popular reloadable prepaid cards, such as the EastWest Prepaid Card and YAZZ card, work like a Visa or Mastercard, and many can be linked to a customer’s PayPal account.   
  • The main ATM/POS networks are BancNet, MegaLink, Expressnet, Nationlink and Encash, and there is a total of 22,523 ATMs in operation, servicing around 60 million cardholders.  
  • Multipurpose e-cards are used to pay utility bills and withdraw cash. The widely used Beep smart card is utilised on public transport and at toll booths and convenience stores in metro Manila.  

Online Payments 

  • The financial technology (fintech) sector is a growing area in the Philippines, with the value of fintech transactions estimated to grow at a rate of 19% annually over a four-year period.    
  • BSP has adopted a ‘regulatory sandbox’ approach to the development of the fintech industry by providing start-ups the opportunity to operate.   
  • The digitisation of payment systems has been hindered by low smartphone, internet and bank account penetration, and lack of technical and financial infrastructure. 
  • Philippine Payments Management, Inc. (PPMI), under the guidance of BSP, launched “QR Ph” as the National QR Code standard. It was launched through six participating banks as a national QR code standard processed through the InstaPay system. Numerous QR payment systems were consolidated into one interoperable platform, improving convenience for both merchants and customers. The platform now has 21 participating banks.  
  • E-commerce now represents a quarter of all nationwide transactions, of which half are cashless.  

Digital Currencies  

  • Cryptocurrency is accepted as legal tender in the Philippines but only if it is registered with the BSP. Bitcoin has been registered and is becoming popular, especially for transferring remittances from overseas.    
  • The BSP has awarded licenses to Bitcoin companies to operate within specific economic zones, although the exchange to virtual currency has to be done offshore.  

Cash, Cheques and Money Orders 

  • Cash is still the most common form of payment, comprising over 90% of total payments.   
  • Cheques are still the most common form of cashless payment for retail and commercial transactions.  
  • MICR-encoded cheques are cleared through ECCS and final settlement is done through PhilPaSS. In Greater Manila, settlement is done the next day and outside of this area, up to seven working days.  
  • Money orders, for both domestic and international remittances, can be arranged through PHLPost as well as vendors such as Western Union and MoneyGram.  

For more information, login to Treasury Prism for contextual insights on market regulations that are relevant to your cash management structure.

Sources (Intro & Corporate Treasury):  
IMF, World Economic Forum, World Bank, PwC, Bangko Sentral ng Pilipinas, Bank for International Settlements, Asian Development Bank, CEIC, Trading Economies, DBS 

Sources (Banking & Payments): 
Bangko Sentral ng Pilipinas, PDS Group, Philippine Clearing House Corporation,,  

Get in touch
call icon


From overseas: +65 6222 2200
In Singapore: 1800 222 2200
Operating hours: 8.30am to 8.30pm, Mon - Fri (excluding PH)