MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is adopting a smarter approach to supervise money service businesses (MSBs) and pawnshops to boost financial integrity and prevent financial crimes.
In its Philippine Financial System report, the BSP said it has moved to enhance supervision by applying a proportionate, risk-based approach that aligns oversight with the size, complexity and risk profile of MSBs and pawnshops.
This is done through the Recalibrated Approach for MSB and Pawnshop Supervisory Assessment Framework (RAMPS).
According to the central bank, RAMPS would ensure that regulatory measures match the level of risk, thereby upholding financial integrity and stability while supporting sustainable growth of the pawnshop and MSB sectors.
BSP developed RAMPS as a supervisory framework that is both adaptive and proportional.
This means higher-risk or more complex entities receive heightened oversight and stricter compliance requirements, while smaller, lower-risk entities benefit from simplified regulatory expectations, avoiding undue regulatory burden.
“This approach ensures that regulatory measures correspond to the risk each business poses to the sector and the broader financial system,” the BSP said.
The approach is also seen helping target complex financial networks, allowing the central bank to identify and address financial flows more effectively.
By focusing on businesses that handle cross-border transactions or have multiple points of contact within the financial ecosystem, RAMPS helps detect complex money laundering schemes.
This is likewise seen facilitating better data collection on transactions that are more likely to be risky.
“With a more granular oversight, BSP can track emerging trends, uncover patterns of suspicious activity and disrupt illicit financial flows. By focusing on higher-risk transactions, RAMPS enables BSP to take prompt and decisive action, optimizing prevention of financial crimes,” it said.
The flexibility of RAMPS also allows BSP to adapt to emerging threats and vulnerabilities, such as those arising from technological advancements, online platforms and digital transactions.
This capability ensures that businesses facing new risks – such as online MSBs or pawnshops involved in virtual assets and other online transactions – are closely monitored, helping BSP stay ahead of evolving challenges and ensuring the financial system remains protected from emerging risks.
As of end-2024, BSP oversees 1,428 pawnshops and 723 MSBs, collectively operating more than 31,000 units of head office, branch and sub-agent.