The Bangko Sentral ng Pilipinas (BSP) said it has forged a regional payment connectivity alliance with the central banks of Indonesia, Malaysia, Singapore and Thailand.
The five central banks, namely BSP, Bank Indonesia (BI), Bank Negara Malaysia (BNM), Monetary Authority of Singapore (MAS), and Bank of Thailand (BOT) signed a memorandum of understanding (MOU) for the Regional Payment Connectivity (RPC) on Monday, Nov. 14, on the sidelines of the G20 Leaders’ Summit in Bali.
The MOU, an enhanced and stronger cooperation on payment connectivity, is expected to deliver a “faster, cheaper, more transparent, and more inclusive cross-border payments.”
During his keynote address, Indonesian President Joko Widodo emphasized the importance of “concrete joint collaborative action in addressing global challenges” and to “further accelerate regional payment connectivity.”
BSP Deputy Governor Mamerto E. Tangonan, who represented the BSP, said the MOU will concretize the regional central banks’ “collaborative and inclusive approach” to improve and update cross-border payments in the ASEAN trade bloc. The cooperation will also “translate into efficiency gains and cost savings in various international financial transactions and economic activities,” he said.
“The more we recognize how interdependent our economies are, the more we need to be deliberate in our pursuit of the vision of an interconnected ASEAN region,” added Tangonan.
The BSP, with the four other central banks, said the RPC will contribute to the acceleration of regional economic recovery and in encouraging inclusive growth.
“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. This is particularly beneficial for micro, small, and medium enterprises as it will facilitate their participation in international markets. The cooperation will include a number of modalities, including QR code and fast payment,” according to the joint statement.
The BSP said the payment connectivity alliance with the four central banks could be expanded to include other countries in the region and even outside of ASEAN.
The collaboration supports ASEAN’s “shared aspiration for connected payment systems that will enable fast, seamless and more affordable cross-border payments across the region,” said the BSP.
In the joint statement, BI Governor Perry Warjiyo said the MOU will expand existing bilateral payment connectivity arrangements while BNM Governor Nor Shamsiah Yunus said the central bank collaboration will likewise push for the development of the next-generation payment connectivity.
MAS Managing Director Ravi Menon, for his part, said the MOU will boost ASEAN’s regional payments interoperability and connectivity by 2025 while BOT Deputy Governor Ronadol Numnonda said that since ASEAN is a global hotspot in cross-border payments linkages, the MOU could serve as basis for multilateral collaboration in the future for the trade bloc’s digital transformation and financial integration.