The Bangko Sentral ng Pilipinas (BSP) announced Monday, Nov. 8, that it has signed an enhanced FinTech Cooperation Agreement (CA) with the Monetary Authority of Singapore (MAS) for interoperable payments between the two countries.
“This enhanced CA 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,” said BSP Governor Benjamin E. Diokno, in a joint statement with MAS.
The CA will improve the linkage of both countries’ real-time and QR payment systems, as well as to facilitate instant, seamless, and low-cost cross-border payments. The first CA, which is now improved upon, was originally set in 2017.
Both BSP and MAS said the CA is significant because of the “sizeable remittance flows between the Philippines and Singapore” totalling about $2.15 billion in 2020. Before the pandemic, there were some 900,000 travelers between both countries.
Diokno said the CA is the initial step “in linking the Philippine payment system with those of our ASEAN neighbors, beginning with Singapore.”
“Effectively linking our QR 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,” said Diokno. Beneficiaries include overseas Filipinos, export, import and tourism businesses, as well as firms with affiliates or investors abroad, he said.
For his part, MAS Managing Director Ravi Menon, said the enhanced CA “will help fast-track payments connectivity between Singapore and the Philippines.”
“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,” said Menon.
The BSP and MAS’s improved collaboration for payment infrastructure projects support the G20’s efforts to address existing frictions in global cross-border payments, and contributes to ASEAN’s goal of establishing regional payments integration by 2025, said the BSP.
“Both central banks will also explore multilateral interoperability of these projects, in keeping with regional efforts to establish further linkages within ASEAN and with countries outside the region,” it added.