THE Philippines and India will soon partner on financial technology (fintech), innovative technologies, digital governance, payment linkages and related areas.
A memorandum of understanding (MOU) between the government of India’s Department of Economic Affairs, Ministry of Finance and Department of Finance on Financial Technology, as well as the Department of Finance (DOF), was signed by Ambassador Shambhu S. Kumaran and Secretary Benjamin E. Diokno.
The MOU envisions the constitution of a joint working group (JWG) cochaired at the undersecretary level from both countries’ ministries of Finance, comprising senior representatives from foreign and Internet-technology ministries, central banks, financial sector-regulatory institutions and allied agencies as members.
The JWG would identify concrete measures for partnership in innovative technologies, fintech industry, digital governance, payment linkages, creation of interoperable application programming interfaces or APIs, financial inclusion and similar sectors.
Kumaran noted that during their teleconference last year, Prime Minister Narendra Modi and President Ferdinand R. Marcos Jr. identified their countries’ partnership in the digital economy, particularly in the financial sector, as a priority area for bilateral engagement.
The envoy said the MOU would enable building such a collaboration by providing an institutional framework for cooperation on three key areas: digitalization of payments, direct-benefit transfer using national identification (ID), and financial inclusion.
He hoped the MOU will connect India’s thriving financial sector ecosystem, which has recently made impressive strides, with that in the Philippines, where the sector is growing rapidly.
The India experience
IN India, he pointed out, digital payments have witnessed exponential growth, with the flagship Unified Payment Interface emerging as the primary driver toward a cashless economy. The memorandum, he said, would enable the Philippines to adopt the best practices from India.
For his part, Diokno noted that the Marcos Jr. administration has placed a premium on digital transformation. The MOU, he stated, is a milestone that opens boundless opportunities for cooperation, as India is a rising economic powerhouse, with a forte in digital technologies, while the Philippines hosts a young and tech-savvy talent pool that can yield successful intellectual capital in the digital economy.
The secretary explained that intergovernmental engagement under the memorandum will promote cooperation between the fintech industries in India and Philippines. It includes development of fintech solutions across business and financial sectors, creation of interoperable standards for API to strengthen digital governance, promotion of digital signatures across borders, and mainstreaming digital fund-transfer platforms, among others.
One focus area under the MOU, both officials noted, is promoting financial inclusion to address the digital divide.
In this context, the ambassador pointed to the significant progress in India in terms of the “India Stack” Digital Public Infrastructure (DPI) based on the foundational Aadhar ID system, then added that the Philippines has based its own national ID on the Indian modular open-source identity platform or MOSIP, which would enable similar initiatives to be successfully implemented by the Philippines.
India, according to its embassy, has signed similar MOUs with Singapore and the United Kingdom on fintech cooperation.
For the Indian Embassy, the MOU signing—following on the February 2023 pact on Indian Quick-Impact Projects—“underlines the rapid scaling up of India-Philippines economic engagement focused on [efforts boosting the developmental partnership between the Indo-Pacific Region’s] two vibrant democracies.”
Image credits: Embassy of India
