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The Philippines Inks Cross-Border Payment Agreement with Singapore

The Philippines’ central bank, Bangko Sentral ng Pilipinas (BSP) and Singapore’s Monetary Authority (MAS) signed an upgraded FinTech Cooperation Agreement (CA) to promote interoperable payments between the two countries. The upgraded CA builds on a 2017 agreement between the BSP and MAS to broaden the scope of FinTech collaboration and partnership.

The CA will help link the real-time and QR payment systems of both countries, allowing for instant, smooth, and low-cost cross-border payments. Considering the massive remittance transfers between the Philippines and Singapore, which totalled USD 2.15 billion in 2020, and the pre-pandemic monthly average of nearly 900,000 travellers between the two nations, this is a big endeavour.

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.

– Benjamin E. Diokno, Governor, Bangko Sentral ng Pilipinas 

The collaboration of the BSP and MAS in payment infrastructure initiatives is in line with the G20’s efforts to resolve existing frictions in global cross-border payments and helps ASEAN’s objective of achieving regional payments integration by 2025. Both central banks will seek multilateral interoperability of these projects, as part of regional efforts to strengthen ties both within ASEAN and with countries beyond the region.

“The BSP is taking the first step in integrating the Philippine payment system with those of our ASEAN neighbours, beginning with Singapore,” said BSP Governor Benjamin E. Diokno. By effectively connecting the country’s QR and real-time payment systems, it will improve the safety and efficiency of cross-border payments by allowing for a speedier and more seamless international movement of cash, thereby benefiting Filipinos who use cross-border payment services.

Overseas Filipinos, export, import and tourism enterprises, as well as firms with affiliates or investors abroad, may be among the benefactors. The BSP is convinced that this improved CA will boost the Philippines’ connection with Singapore and bring the ASEAN region one step closer to establishing an integrated and interoperable cross-border payment system.

Ravi Menon, Managing Director of MAS then said, “The enhancements to the MAS-BSP FinTech Cooperation Agreement 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.”

Ultimately, the improved collaboration between the BSP and the MAS on payment infrastructure projects supports the G20’s efforts to resolve existing frictions in global cross-border payments and helps ASEAN achieve its objective of regional payments integration by 2025.

OpenGov Asia reported the Bangko Sentral ng Pilipinas (BSP) payment system is said to be using the quick response (QR) code as a catalyst to drive digital payments in the country. QR PH is one of the programmes the central bank feels would increase the share of digital payments in the total financial transactions in the country. The interoperability of the codes under the QR PH programme, which uses QR technology in financial transactions, provides significant potential for electronic payments.

The Executive Vice President of a participating commercial bank in the Philippines said its app-based digital prepaid bank account product will benefit greatly from the QR PH programme, particularly with the increase in merchants with whom account holders can easily transact. “We see a lot of potential for these QR payments. We have onboarded a lot of merchants and, coupled with the QR PH interoperable QR PH QR codes, we see more digital payments.”

In addition, the BSP recently unveiled the QR PH person-to-merchant (P2M) payment facility, an electronic payment system that allows buyers to pay for small-value transactions such as jeepney or tricycle fares, as well as payments of goods and services to micro, small, and medium-sized enterprises (MSMEs) at no cost to the buyer.

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