Workforce Payments Guide Philippines
Last updated: Dec 20, 2023
Papaya Global fully supports payments in the Philippines.
Papaya Global supports payments to contractors in the Philippines. The payout currency may vary based on the receiver bank account setup when receiving foreign currencies. it is advised for contractors to reach out to their bank to confirm how foreign currencies are handled
|IBAN Example Portugal
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|PT58 0035 0651 6261 5379 9988 5
|Bank Account Number
In the Philippines, companies are required to perform a Know Your Customer (KYC) process to their clients. The KYC process involves the following steps:
Customer identification: Companies start the KYC process by asking customers to provide a range of basic information about their business operations and individuals. This includes the names of the company’s directors, business addresses, national insurance or social security numbers, company numbers, and so on.
Document verification: The KYC process entails the examination of identification documents, pictures, and files that use biometrics and service charges as confirmation of residency.
Risk assessment: Companies should be able to identify the legitimacy of the customer and ensure they’re not tarnished by political or criminal connections and don’t have a history that would be too risky to deal with.
Continuous monitoring: Institutions are moving toward perpetual KYC solutions for performing customer due diligence wherein customers, irrespective of their risk profile, are screened in real time or near real time based on trigger events.
e-KYC: The Bangko Sentral ng Pilipinas (BSP) released a circular outlining amendments to existing customer due diligence (CDD) requirements for supervised financial institutions (FIs). The updates include new electronic Know Your Customer (eKYC) rules detailing how digital IDs (such as the Philippines’ national ID, PhilSys) can be used during customer onboarding.
Cross-border workforce payments in the Philippines are subject to several banking laws and regulations. Here are some key aspects:
Cross-border payment connectivity: The Bangko Sentral ng Pilipinas (BSP) is working towards implementing cross-border payment connectivity within the next two to three years. This initiative aims to foster a more inclusive financial ecosystem by enabling fast, seamless, and cheaper cross-border payments across the region.
ASEAN agreement: In November 2022, the BSP signed a memorandum of understanding with other central banks in the ASEAN region to strengthen collaboration on payment connectivity. This agreement is expected to support and facilitate international trade, investment, and other economic activities.
National Payment Systems Act (NPSA): The NPSA mandates the BSP to oversee payment systems in the Philippines and exercise supervisory and regulatory powers for the purpose of ensuring the stability and effectiveness of the monetary and financial system.
Digital infrastructure and platforms: Promoting and facilitating the development of digital infrastructure and platforms is crucial to addressing internet connectivity issues in underserved areas in the country. By doing so, access of individuals and small businesses to digital financial services may increase.
Here are some of the major foreign banks that operate in the Philippines:
- Citibank: Operates six full-service branches in key locations in Metro Manila and Metro Cebu
- Bank of America
- J.P. Morgan Chase
- Hua Nan Commercial Bank Ltd. (Taiwan)
- Cathay United Bank (Taiwan)
- First Commercial Bank (Taiwan)
- CIMB Bank (Malaysia)
- Sumitomo Mitsui (Japan)
- United Overseas Bank Ltd. (Singapore)
Major Local Banks
Here are some of the major local banks that operate in the Philippines:
- BDO Unibank, Inc. (BDO)
- Land Bank of the Philippines (LBP)
- Bank of the Philippine Islands (BPI)
- Metropolitan Bank and Trust Company (Metrobank)
- China Banking Corporation (Chinabank)
- Philippine National Bank (PNB)
- Rizal Commercial Banking Corporation (RCBC)
- Development Bank of the Philippines (DBP)
- Union Bank of the Philippines (Unionbank)
- Security Bank Corporation (Security Bank)
B2C Payment Tools
There are several B2C payment tools available in the Philippines. Here are some of them:
- GCash Payment Solutions: With over 81 million users as of May 2023, GCash is the ultimate payment solution in the Philippines due to its large reach
- Maya Business
- Dragonpay: A close second to GCash, thanks to its flexibility and ease of use
- Payo Cash on Delivery
Opening a Bank Account
To open a company bank account in the Philippines, you will need to provide the following documents:
- Certificate of incorporation or license to transact business
- Articles of incorporation
- Board resolution to open bank account naming the authorized signatories
- Certificate of registration with the Securities and Exchange Commission (SEC) or other relevant government agencies
- Mayor’s permit: A permit obtained from the local government unit where your business operates
- Valid IDs: Personal identification documents of authorized signatories and beneficial owners
The process of opening a company bank account in the Philippines usually takes a few business days. The duration can vary depending on the bank and the level of documentation you need to provide.
Cryptocurrency is acceptable in the Philippines, but it is regulated by the government. The Bangko Sentral ng Pilipinas (BSP), the country’s central bank, issued Circular No. 944 in 2017, acknowledging virtual currencies as a valid payment method. This circular mandated virtual currency exchanges to register with the BSP and adhere to anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.
In 2021, the BSP introduced the Guidelines for Virtual Asset Service Providers (VASPs), establishing a comprehensive regulatory framework for virtual currency exchanges in the Philippines. As part of the framework, VASPs must obtain a license from the BSP before commencing operations in the country. Furthermore, the guidelines emphasize the importance of implementing effective Know Your Customer (KYC) and AML/CTF measures. VASPs must collect customer identification information and actively monitor transactions to detect and report suspicious activities.
As of January 31, 2023, there are 19 registered VASPs in the Philippines, including ABA Global Philippines, Inc. (trading as COEX STAR), Bloomsolutions, Inc., and the Philippine Digital Asset Exchange (PDAX). These VASPs provide various services, such as trading, remittance, and asset management, to cryptocurrency users in the country.
The Securities and Exchange Commission (SEC) is the government agency in charge of regulating the Philippines’ securities, investments, and financial instruments. In 2018, the SEC issued an advisory on initial coin offerings (ICOs) and cryptocurrency investments, warning investors about the risks involved and mandating that companies conducting ICOs register with the SEC and adhere to securities regulations.