Two years from now, Overseas Filipino Workers (OFWs) and their families may be able to enjoy a cheaper way to send and receive remittances.
This is thanks to the “Asean Nexus” platform that, according to the Bangko Sentral ng Pilipinas (BSP), may be “ready-for service” by July 2026.
In a briefing last Wednesday, BSP Governor Eli M. Remolona Jr., the platform will allow cross-border payments between and among countries with fast-payments systems—like the country’s InstaPay—for a fraction of the cost.
“Once it’s in place, once it’s operational, we’re hoping that remittances can be sent to the Philippines very cheaply. Without going to correspondent banks, the money from dollars can be changed into pesos and back into ringgit within the platform. To me, it’s a very promising platform for cross-border payments,” Remolona said.
Remolona said, however, the platform’s reach will be limited to countries with fast-payment systems such as members of the Association of Southeast Asian Nations (Asean) like Malaysia, Indonesia and Singapore.
Countries like India and Brazil, who also have fast payments systems, can be added to the platform. However, countries like the United States or those in the European Union who do not have fast payment systems, cannot join.
“The nice thing about this platform is it’s completely scalable. It’s decidedly scalable from the beginning so that anybody else who has a fast payment system can just attach themselves to this platform,” Remolona said.
“This is an international effort, by the way. So we’re being helped by the Bank of International Settlements (BIS) to develop this. It will be two years’ wait,” the central bank governor added.
Last year, the BSP and five other central banks in Southeast Asia signed the Regional Payment Connectivity (RPC) cooperation that will allow cross-border payments to become more seamless.
A joint statement by the BSP, the Bank Indonesia, the Bank Negara Malaysia, the Monetary Authority of Singapore and the Bank of Thailand expressed these central banks’ expectations the RPC will benefit micro-sized, small-scale, and medium-sized enterprises (MSMEs). The Asean central banks added they expect the RPC to be a significant contributor to accelerating regional economic recovery and promoting inclusive growth.
The RPC is also expected to facilitate the participation of MSMEs in international markets. The cooperation will include a number of modalities, including QR codes and fast payment.
The implementation of cross-border payment connectivity serves to support and facilitate cross-border trade, investment, financial deepening, remittance, tourism, and other economic activities, as well as a more inclusive financial ecosystem in the region.
The payment connectivity initiative could be expanded to include other countries in the region and potentially other partner countries outside the region.