THE BANGKO SENTRAL ng Pilipinas (BSP) signed a memorandum of understanding (MoU) with other central banks in the Association of Southeast Asian Nations (ASEAN) to strengthen collaboration on payment connectivity.
The MoU on Cooperation in Regional Payment Connectivity (RPC) was signed on the sidelines of the G20 Leaders’ Summit with the Bank of Indonesia (BI), Bank Negara Malaysia (BNM), Monetary Authority of Singapore (MAS), and Bank of Thailand (BoT) on Nov. 14 in Bali, Indonesia.
“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,” BSP Deputy Governor Mamerto E. Tangonan said in a joint statement released on Monday.
“This MoU concretizes our collaborative and inclusive approach to enhancing cross-border payments in the ASEAN that will translate into efficiency gains and cost savings in various international financial transactions and economic activities,” he added.
The RPC is expected to contribute in accelerating economic recovery and promoting growth as it aims to foster a more inclusive financial ecosystem by enabling fast, seamless, and cheaper cross-border payments across the region.
Implementation of cross-border payment connectivity will support and facilitate international trade, investment, and other economic activities.
Cross-border payment connectivity will also help small businesses in participating in international markets. The cooperation will include a number of modalities, including QR code and fast payment.
“This MoU serves as a significant milestone in paving the road for advancing cross-border payment connectivity. Existing bilateral payment connectivity arrangements will be expanded as part of the region’s efforts to strengthen its economic integration,” BI Governor Perry Warjiyo said.
“Such collaboration among central banks is key to accelerating economic recovery. We hope that other countries will follow this good example and leadership in implementing cross-border payment connectivity,” Mr. Warjiyo added.
The initiative could expand to include other countries in the region moving forward. This also marks the start of Indonesia’s leadership of the ASEAN region next year.
The RPC is in line with Indonesia’s G20 Presidency priority agenda in the area of digital transformation.
“This MoU underscores ASEAN’s commitment to achieve regional payments interoperability and connectivity by 2025 to enable cheaper, faster, and more transparent cross-border payments,” Ravi Menon, managing director of MAS, said.
“ASEAN’s effort is aligned with the G20’s goal of addressing existing frictions in global cross-border payments, creating new business opportunities and enabling inclusive growth,” he added.
For her part, BNM Governor Nor Shamsiah Yunus said the initiative highlights the importance of central bank collaboration in developing payment connectivity.
“Realizing the vision of an ASEAN regional network of fast and efficient cross-border payment systems will advance our digital ambitions and further deepen financial integration for the benefit of the region’s economic development,” she added.
The initiative also hopes to open wider participation in the ASEAN region, in line with ASEAN’s approach to deepen integration through mutually beneficial agreements, thus fostering stronger regional economic ties.
BoT Deputy Governor Ronadol Numnonda, who represented BoT Governor Sethaput Suthiwartnarueput, said the ASEAN region has become a global hotspot in international payments linkages.
“Building on our previous efforts, this MoU marks another milestone in our ASEAN Payment Connectivity initiative in working together to address the long-standing pain points in cross-border payments,” he said.
“It also dovetails ASEAN members’ current network of bilateral cross-border payment linkages and will serve as a basis for multilateral collaboration going forward,” he added. — Keisha B. Ta-asan