India and the Philippines agree to work together on fintech

20 Jun 2023 , 11:12 AM

A Memorandum of Understanding (MOU) on the collaboration in financial technology (fintech) was signed on Monday in Manila by the Department of Economic Affairs, Ministry of Finance, Government of India, and the Department of Finance, Government of the Philippines.

Shambhu S. Kumaran, the Indian ambassador to the Philippines, and Benjamin E. Diokno, the Department of Finance’s (DOF) secretary, both signed the MOU.

The MOU calls for the formation of a Joint Working Group (JWG), which will be co-chaired at the undersecretary level by the finance ministries and include senior representatives from the foreign and information technology ministries, central banks, financial sector regulators, and other related agencies.

The JWG will devise specific steps for collaboration in the fields of cutting-edge technologies, the fintech sector, digital governance, payment linkages, development of interoperable APIs, financial inclusion, and other relevant fields.

Speaking at the event, Kumaran noted that President Ferdinand R. Marcos Jr. and Prime Minister Narendra Modi of India had identified cooperation in the financial sector, specifically, as one of the priority areas for bilateral engagement during their phone call last year.  He claimed that by providing an institutional framework for collaboration on three crucial areas—the digitalization of payments, direct benefit transfer utilizing national ID, and financial inclusion—this MoU will act as an enabler in developing such a partnership.

Kumaran believed the MOU would link the burgeoning financial sector ecosystem in India, which has made significant achievements recently, with the one in the Philippines, where the industry is expanding quickly. He noted that the flagship Unified Payment Interface (UPI) is emerging as the key driver toward a cashless economy in India, where digital payments have seen exponential growth, reaching around 100 billion annually. The MOU would make it possible for the Philippines to use Indian best practices in this area.

Digital transformation has been given top priority by President Marcos Jr.’s Administration, according to Finance Secretary Benjamin E. Diokno. He claimed that the MOU is a turning point that creates limitless opportunities for collaboration because the Philippines is home to a young, tech-savvy talent pool that can provide the intellectual capital needed to succeed in the digital economy, while India is a rising economic powerhouse with a specialty in digital technologies.

The official continued by saying that intergovernmental cooperation under the MOU will promote cooperation between the fintech industries in the Philippines and India, including the development of fintech solutions across business and financial sectors; development of interoperable standards for Application Programming Interface (API), thereby strengthening digital governance; promotion of the use of digital signatures across borders; and mainstreaming of digital fund transfer platforms, among others.

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