Workforce Payments Guide Philippines

Papaya offers Virtual IBAN accounts (or “wallets”) to hold your funds segregated and safeguarded until payments are ready to be processed. Opening and managing corporate bank accounts can often be complex and time-consuming, requiring extensive checks and due diligence.

Papaya’s Virtual IBAN solution, built on the trusted infrastructure of JPMorgan, streamlines this process-making it faster, easier, and more cost-effective while ensuring your funds are secured.

Delivery timeline

Supported Payment Types

3rd Party Payments

In the Philippines, the payment due dates for employers are as follows:

Social Security System (SSS) contributions: The deadline for remittance of regular employers is every last day of the month following the applicable month. For example, contributions for the applicable month of January can be paid until the end of February.

PhilHealth contributions: Employers whose PhilHealth Employer Number (PEN) ends in 0 to 4 must remit the contributions on the 11th to 15th day of the month following the applicable period. Employers with PEN ending 5-9, the deadline is every 16th – 20th day of the following month.

If the deadline falls on a Saturday, Sunday, or holiday, payments will still be accepted on the next working day.

Contractor payments

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.

Bank Requirements

SWIFT code

Payroll payment Frequency

Monthly

KYC

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.

Banking Regulations

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.

International Banks

Local Banks in Philippines

Payment Methods

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
• PayMongo
• Dragonpay: A close second to GCash, thanks to its flexibility and ease of use
• Payo Cash on Delivery
• Coins.ph
• PesoPay
• 2Checkout
• PayPal
• NextPay

Cryptocurrency

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.