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New check clearing process in Philippine banks

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A few weeks ago, I issued a post-dated check (PDC) but forgot to fund it prior to deposit date. My bank, the Bank of the Philippine Islands (BPI), called me up to follow up. I then immediately made the fund transfer and the check was honored on the same day without me paying any fees.

Unfortunately, starting this year, this is not anymore possible. The Bangko Sentral ng Pilipinas (BSP) recently issued Circular No. 681 or the “Revised Check Clearing and Settlement Processes.” Taking effect on January 1, 2011, the circular basically requires check issuers to fund the check prior to issuance.

BSP Circular: Revised Check Clearing and Settlement Processes

The BSP circular requires banks to return Drawn Against Uncleared Deposit (DAUD) and Drawn Against Insufficient Funds (DAIF) checks to the Philippine Clearing House Corporation (PCHC) by 7:30am the next day.

What this means is that there’s no more window for late funding. Any unfunded check will be considered as returned or bounced checks. At the same time, a returned check will be charged a fee of Php2,000 plus Php200 for every Php40,000 fraction of the check amount per day (not sure if this is the rate of BPI or by all banks).

As for checks subject to Stop Payment Order (SPO), they can be honored as long as the check has not been deposited for clearing by the payee yet. Otherwise, they will be considered unfunded already and will be charged the corresponding fees.

The new BSP Circular simply forces us to ensure that the account is funded when issuing checks.

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About this post: clearing of checks in the philippines, check clearing process in the philippines, clearing of checks, DAUD MEANING, daud check meaning
  • Dunkin

    Good day po! I just want to know what are the different types of clearing checks & its no. of clearing days.

    1. Manila/otherGovernment Checks
    2. Out-of-Town Regional Checks
    3. Out-of-Townchecks drawn against banks not participant to the BSP Regional Clearing

    4. what are the other types of checks for clearing


    • Caloisky

      Lahat po ng checks, ay local clearing na.

  • Anne Celine Marquez

    Tanong lang po. Paano kung ang issued date ay natapat ng Saturday tapos yung bank ay close every weekend. Pwede pa po ba sa Monday ang cash out? O sa mismong araw lang nakalagay sa check pwede talaga kunin ang pera? Salamat po sa tulong

    • Caloisky

      Pwede ng monday, basta dated ang cheke.

  • yolly remolacio

    kung ang cheque po ay galing ibang bansa gaano po katagal deposit bago ma encash?

  • carol

    paano po na encash ang cheque sa pinas kung nandito sa ibang bansa anf bearer ng cheque? pwede ba ipadeposit sa account ng mother ko. anong mga requirements para madeposit yung cheque sa account ng mother ko

  • jon

    A check drawn against insufficient funds went stale. How can the bank help me prove that it is a “bounced check” when it is already past six months period to encash? I want the bank to help me prove to the borrower that she issued a bounced check and that I want her to settle her payments before I file a case. Advise, please.

    • Netizen

      why did it take you that long to have it encashed? technically, it can’t be considered a “bounced check” when it was not yet deposited or encashed by the payee. Can’t you request for settlement of the payment considering that the check payment was not encashed on time?

  • marvin aloquin

    pano ko po ma view s screen ang update ng checking account ko.