The Monetary Authority of Singapore (MAS) and the Bangko Sentral ng Pilipinas (BSP) have signed an enhanced FinTech Cooperation Agreement (CA) to facilitate interoperable payments between Singapore and the Philippines on Nov 8.

The enhanced CA builds on the earlier agreement signed in 2017 to broaden the scope of FinTech collaboration and partnership between both central banks.

Under this agreement, both countries will link their real-time and QR payment systems to provide instant, seamless and low-cost cross-border payments.

This initiative is “significant”, according to the joint release, given the sizeable remittance flows between Singapore and the Philippines.

In 2020, the amount came up to a total of $2.89 billion.

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The initiative also caters to the pre-pandemic yearly average of around 900,000 travellers between both countries.

MAS and BSP’s collaboration aligns with the G20’s efforts to address existing frictions in global cross-border payments.

It also contributes to Asean’s goal of establishing regional payments integration by 2025.

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.

“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,” says MAS managing director Ravi Menon.

“The BSP is taking the initial step in linking the Philippine payment system with those of our Asean neighbours, 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,” says Benjamin E. Diokno, governor of BSP.

“These beneficiaries may include overseas Filipinos; export, import and tourism businesses; as well as firms with affiliates or investors abroad. 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.”