Filipinos will eventually have seamless financial transactions with counterparts in Singapore after monetary authorities from both countries recently signed another agreement that will pave the way for formal dialogues on this bid.
In her speech during the virtual Digital Pilipinas-World Fintech Festival 2021 on Friday, Bangko Sentral ng Pilipinas (BSP) Assistant Governor Edna Villa said BSP and the Monetary Authority of Singapore (MAS) have signed up an “upgrade” of their 2017 cooperation agreement, now aimed at discussing collaboration on innovation to link payment systems between the two countries.
“Let me just emphasize that while the modality of the linkage is bilateral in nature, the vision is to base this bilateral arrangement on principles that will also be suitable for multilateral linkages, in order to help future-proof the linkage,” she said.
Villa said the upgraded agreement was signed by BSP Governor Benjamin Diokno and MAS managing director Ravi Menon Friday at the sidelines of the virtual Singapore Fintech Festival held from November 8-12.
Under the agreement, both regulators will discuss ways to facilitate financial transactions using the Philippines’ InstaPay and Singapore’s PayNow payment systems.
Villa said that with the Association of Southeast Asian Nations (Asean) now the fifth largest economy in the world, with a combined gross domestic product (GDP) amounting to USD3.2 trillion based on 2019 data, officials from the 10-country group have pushed for the establishment of an interoperable cross-border real-time payment system to further boost globalization of trade and investments.
Also eyed to benefit from this bid are the region’s tourism sector and manpower mobility.
“Digitalization is indeed the way of the new economy… It is here to stay… But just as we are cognizant of that, we also need to be watchful of the form digitalization would take and the speed at which that form would evolve,” she said.
Villa said Singapore is the first country that the Philippines has decided to pioneer this partnership with given the countries’ strong economic relationship and because of the former’s expertise in bilateral and multilateral payments connectivity.
She said aside from being a regulator, the BSP also needs to ensure ways to improve the quality and increase options of financial services that “can uplift the welfare of Filipino consumers and businesses.”
“The BSP will continue to provide an enabling regulatory environment that fosters the development and use of pioneering solutions in the financial and payments services industry while ensuring that the related risks brought about by these innovations are properly identified and timely managed,” she added.
During the same event, BSP director Raymond Estioko said there is no agreement yet on the possible daily transaction limit for the payment system linkage.
“But we take note of the transaction limit amount by Singapore,” he said.
Initially, the system will use the quick response (QR) standards, he added.
Asked on which country the Philippines will partner with next for a similar purpose, Estioko said: “gauging on the economic activity or the transactions between the two countries, it’s either Malaysia or Thailand.”