THE PHILIPPINE central bank seeks to start operating instant cross-border payment service by 2026, it said on Wednesday.
“Once it’s operational, we’re hoping that remittances can be sent to the Philippines very cheaply,” Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. told a news briefing.
The BSP has been trying to boost financial exclusivity and encourage digital payments, saying this would bolster economic recovery.
Money sent home by overseas Filipino workers last year surged by 2.9% to $33.491 billion, lower than the BSP’s 3% estimate and slower than the 3.6% expansion in 2022.
Under the cross-border system, dollars may be converted to pesos without going through banks, Mr. Remolona said.
BSP Deputy Governor Mamerto E. Tangonan told the same briefing the cross-border payment platform would be operational by July 2026.
Last year, the BSP and four other central banks within the Association of Southeast Asian Nations (ASEAN) signed an agreement to connect their domestic instant payment systems through the Bank for International Settlements’ (BIS) Nexus Project.
Called the ASEAN Nexus platform, it seeks to connect all local domestic fast payment systems to facilitate affordable multinational remittance services for its users.
“If you have a fast payment system — in our case it’s InstaPay — you can connect to Nexus,” Mr. Remolona told a separate forum. “ASEAN central banks are all going to be connected to Nexus.”
Nexus, a prototype developed by the BIS Innovation Hub Singapore Centre, links payment system operators with the Eurosystem’s TARGET Instant Payment Settlement, Malaysia’s Real-time Retail Payments Platform and Singapore’s Fast and Secure Transfers.
“It’s decidedly scalable from the beginning so that anybody else who has a fast payment system can just attach themselves to this platform,” the BSP chief said.
The central bank expects fees for account-to-account transfers to cost as much as 3% of the transaction value, said Mr. Tangonan, who heads the BSP’s payments and currency management sector.
The central bank in 2022 signed a memorandum of understanding with other central banks in ASEAN to boost partnerships on regional payment connectivity. — Beatriz Marie D. Cruz