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Finance · Payments
Clearing (Payments)
Reference entry · last updated 20260910
Clearing is the exchange and reconciliation of payment instructions before settlement. It can include confirming instructions and calculating net obligations.[1]
1. First principles: instructions and obligations
Payment instructions identify the value to be transferred and the parties involved. Clearing checks and reconciles those instructions so the participating institutions can establish their obligations. Settlement discharges the obligations through a transfer of funds.[1]
2. Net clearing results
Under net settlement, payments can be combined into amounts owed by or to each institution. The clearing result specifies those amounts; settlement records the transfer that meets them.[1]
Illustrative example: Bank A owes Bank B ₱900, and Bank B owes Bank A ₱400. Offsetting the obligations leaves Bank A owing ₱500. The calculation alone has not transferred the ₱500.
3. Philippine retail payments
The NRPS framework uses automated clearing house agreements to govern payment streams. A clearing switch operator processes instructions under the agreed rules.[2]
4. See also
- Settlement (Payments)
- National Retail Payment System (NRPS)
- InstaPay (Philippines)
- PESONet (Philippine Batch Payments)