THE Bangko Sentral ng Pilipinas (BSP) announced on Monday that it has signed an enhanced “FinTech Cooperation Agreement” with the Monetary Authority of Singapore (MAS) to pursue easier cross-border payment linkages between the two countries.
In a joint statement, the central banks said the agreement will facilitate the linkage of both countries’ real-time and QR-payment systems, to facilitate instant, seamless and low-cost cross-border payments.
The enhanced CA builds on the earlier 2017 agreement to broaden the scope of FinTech collaboration and partnership between BSP and MAS.
“The BSP is taking the initial step in linking the Philippine payment system with those of our Asean [Association of Southeast Asian Nations] neighbors, beginning with Singapore,” BSP Governor Benjamin E. Diokno said. “Effectively linking our QR [Quick Response] and real-time payment systems will enhance the safety and efficiency of cross-border payments through the smoother and seamless international transfer of funds, ultimately promoting the financial welfare of Filipinos that regularly use cross-border payment services.”
Diokno said overseas Filipinos, businesses in export, import and tourism and firms with affiliates or investors abroad will benefit from the agreement.
Remittance flows between the Philippines and Singapore totaled $2.15 billion in 2020. The BSP said there is a pre-pandemic yearly average of approximately 900,000 travelers between both countries.
“This enhanced [cooperation agreement] will further strengthen our ties with Singapore and take us a step closer towards having an integrated and interoperable cross-border payment system in the Asean region,” Diokno said.
The central bank said the collaboration in payment infrastructure projects aligns with the G-20’s efforts to address existing frictions in global cross-border payments. Both central banks also said they will explore multilateral interoperability of these projects, in keeping with regional efforts to establish further linkages within Asean and with countries outside the region.
“The enhancements to the MAS-BSP FinTech Cooperation Agreement will help fast-track payments connectivity between Singapore and the Philippines,” MAS Managing Director Ambat Ravi S. Menon was quoted in the statement as saying. “Critically, the linking of our QR and real-time payment systems also marks a concrete step towards the vision of an Asean network of interconnected real-time payment systems.”