The Philippines‘ central bank, the Bangko Sentral ng Pilipinas, is proposing mandatory PhilSys authentication as part of customer due diligence as vendors roll out passkeys, identity verification, and banking integration.
According to a recently released draft memorandum, the central bank plans to require banks and other BSP-supervised institutions (BSIs) to use the Philippine Statistics Authority’s (PSA) National ID Authentication Services (NIDAS) to verify customers and enhance KYC processes, as well as to promote the country’s identification system, the PhilSys.
“NIDAS integration is a necessary regulatory measure to support the broader use and adoption of the National ID as the country’s foundational identity system,” the central bank said in a statement.
“NIDAS enables BSIs to leverage the National ID for more accurate, secure, and efficient customer identification and verification, strengthening know-your-customer processes.”
NIDAs is the digital verification system that allows public and private businesses to authenticate a person’s identity in real-time via biometric checks and data matching through PhilSys. It was co-developed by the PSA and the Department of Information and Communications Technology (DICT).
Under the proposed rules, BSIs must use NIDAS via National ID eVerify for digital or in-person customer onboarding, account opening, and updates. Those who have not yet completed their NIDAS onboarding must use the National ID Check platform to confirm customers’ national IDs.
“Integration with the NIDAS shall not preclude the application of a risk-based approach in the use of other valid identification documents (ID) and identity verification methods, particularly where no National ID is presented and/or NIDAS is unavailable,” the central bank said.
“Where CDD is conducted through NIDAS, the generated NIDAS authentication confirmation satisfies the ID submission requirements for first-time customers in lieu of a physical or printed National ID.”
The BSP also required BSIs to adopt NIDAS authentication via the PhilSys tiers 1-3.
Tier 1 entails basic online authentication, answering yes-or-no questions, and back-end verification of the PhilSys number (PSN) token. Tier 2 includes e-KYC services with pre-agreed demographic data between the relying party and the PSA. Tier 3 allows lawful interoperability by matching back-end PSN tokens across relying parties, but it is not yet operational.
According to the central bank, the new NIDAs authentication will be implemented in two phases, with the first targeting major retail-facing institutions, to be rolled out three months after the issuance of the memorandum. This phase will cover universal and commercial banks with retail services, digital banks, electronic money issuers, and virtual asset service providers.
The second phase will cover the remaining universal and commercial banks, thrift banks, rural and cooperative banks, operators of payment systems, as well as other BSIs in the Philippines, and will take effect six months after the issuance’s effectivity.
Once a BSI submits the complete application form, along with the corresponding documentary and regulatory onboarding requirements, to the PSA, the BSP will consider the entity compliant with the new regulations.
“Through this initiative, the BSP aims to advance the secure and broader adoption of the National ID across the financial sector while supporting financial inclusion, digitalization, and financial integrity objectives,” the central bank said.
The Philippines Statistics Authority is the primary statistical arm of the government. It handles the country’s national censuses, the compilation of economic data, and the production of official documents.
In August 2018, Republic Act No. 11055, otherwise known as the Philippine Identification System Act, was signed into law. The PhilSys acts as a foundational identification system for all citizens and resident aliens in the Philippines.
As of last year, the PSA claimed that 80% of the Philippines’ population, or 90,290,024 Filipinos, have been registered in the National ID system, while registration centers nationwide remain open for Filipinos and residents who want to register for the National ID.
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