Philippines, India ink ‘fintech’ cooperation deal: What it means

Part of the deal involves the formation of a joint working group (JWG) on fintech with the Department of Economic Affairs, Ministry of Finance of India.

Manila: A memorandum of understanding (MOU) between India and the Philippines was signed on Monday (June 19, 2023) to boost bilateral collaboration in the fintech industry.

The use of fintech — the integration of technology into service offerings by financial services companies to consumers — has seen a major surge in the Philippines.

Throughout the recent pandemic, fintech's influence on the Philippine economy grew. During  lockdowns, the use of cashless transactions increased as customers raised awareness of systems like PLDT's Maya and Globe's GCash.

The country's central bank (Bangko Sentral ng Pilipinas, BSP) reported an unprecedented 5,000 per cent spike in digital payments in 2021, at the height of the coronavirus pandemic.

The MOU was signed by Secretary Benjamin Diokno and Indian Ambassador to the Philippines Shambhu Santha Kumaran, the Philippines’ Department of Finance stated on Monday.

Part of the deal involves the formation of a joint working group (JWG) on fintech with the Department of Economic Affairs, Ministry of Finance of India.

According to the statement, the JWG will do the following: promote cooperation in the development of fintech solutions for the business or financial sectors, facilitate intergovernmental discussions on the exchange of best practices, and lead the development of international standards by producing an international version of application programming interfaces.

The DOF and India's DEA will share leadership of the JWG.

The Department of Foreign Affairs, the National Economic and Development Authority, the Bangko Sentral ng Pilipinas, the Department of Information and Communications Technology, the Securities and Exchange Commission, the Insurance Commission, and the Philippine Statistics Authority would also be included in the group.

The Ministry of Electronics and Information Technology of India, the Union Identification Authority of India, the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory Development Authority of India, the Pension Fund Regulatory and Development Authority, the Ministry of External Affairs, the International Financial Services Centres Authority, and the Indian Computer Emergency Response Team will strengthen India's representation in the group.

The surge in digital cash payments in the Philippines is aided by the increasingly ubiquitous use of smart phones and internet infrastructure, helping people and merchants move money around.