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After monetary authorities from both countries recently signed another agreement that will pave the way for formal dialogues on this bid, Filipinos will eventually be able to conduct seamless financial transactions with counterparts in Singapore.

Assistant Governor Edna Villa of the Bangko Sentral ng Pilipinas (BSP) said in her speech at the virtual Digital Pilipinas-World Fintech Festival 2021 on Friday that the BSP and the Monetary Authority of Singapore (MAS) have signed a “upgrade” of their 2017 cooperation agreement, which now aims to discuss collaboration on innovation to link the two countries’ payment systems.

“Let me just emphasize that, while the linkage’s modality is bilateral in nature, the vision is to build this bilateral arrangement on principles that will also work for multilateral linkages in the future,” she said.

BSP Governor Benjamin Diokno and MAS managing director Ravi Menon signed the upgraded agreement on the sidelines of the virtual Singapore Fintech Festival on November 8-12, according to Villa.

Both regulators will discuss ways to make financial transactions easier using the Philippines’ InstaPay and Singapore’s PayNow payment systems under the terms of the agreement.

Officials from the Association of Southeast Asian Nations (ASEAN), which is now the world’s fifth-largest economy, with a combined gross domestic product (GDP) of USD3.2 trillion based on 2019 data, have pushed for the establishment of an interoperable cross-border real-time payment system to boost globalization of trade and investments, according to Villa.

The tourism industry and manpower mobility in the region are also expected to benefit from this bid.

“Digitalization is, without a doubt, the new economy’s path… It’ll be here for a long time… But, while we are aware of this, we must also be aware of the form that digitalization will take and the rate at which it will evolve,” she said.

Given the two countries’ strong economic ties and the former’s expertise in bilateral and multilateral payments connectivity, Villa said Singapore is the first country with which the Philippines has chosen to pioneer this partnership.

She added that, in addition to being a regulator, the BSP must also look for ways to improve the quality and expand the range of financial services available to “improve the welfare of Filipino consumers and businesses.”

“The BSP will continue to provide an enabling regulatory environment that fosters the development and use of cutting-edge solutions in the financial and payments services industry while ensuring that the risks associated with these innovations are properly identified and managed in a timely manner,” she added.

BSP director Raymond Estioko said at the same event that no agreement on a possible daily transaction limit for the payment system linkage has yet been reached.

“However, we take note of Singapore’s transaction limit amount,” he said.

He added that the system will initially use QR (quick response) standards.

“Based on the economic activity or transactions between the two countries, it’s either Malaysia or Thailand,” Estioko said when asked which country the Philippines will partner with next for a similar purpose.

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