Philippines , Indonesia central banks ink cooperation agreement

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has inked a memorandum of understanding (MOA) concerning consultation, cooperation and the exchange of information with its Indonesian counterpart.

BSP Governor Benjamin Diokno and Financial Services Authority of Indonesia (Otoritas Jasa Keuangan) chairman Wimboh Santoso signed the agreement last Sept. 1.

The partnership aims to provide a framework for dialogue and cooperation between the BSP and OJK to discuss initiatives and promote the development of sound financial regulatory mechanisms in both jurisdictions.

Following the signing of the agreement, the BSP and OJK held a virtual bilateral meeting and discussed policy responses to COVID-19 and the strengthening of supervisory cooperation.

Both institutions expressed their commitment to strengthen bilateral cooperation in further enhancing mutual economic and financial system development.

Diokno said earlier the Philippine central bank is finalizing at least six bilateral agreements as it continues to engage its international partners amid the pandemic, in line with its thrust of proactively pursuing international cooperation.

“The pandemic has provided us with an opportunity to widen our engagement and intensify our policy dialogues. Sustained international engagement enables the BSP and its peers to continue learning from each other and pursuing mutually beneficial objectives,” he added.

There are ongoing talks with the Central Bank of Bahrain, Bank of Mauritius, National Bank of Kyrgyzstan Republic and the British Embassy in Manila for cooperation arrangements, as well as with Indonesian and Singaporean authorities for closer institutional cooperation.

The BSP and OJK have lined up talks on the areas of supervisory framework, consumer protection, financial inclusion, financial technology (fintech) and capacity building.

Likewise, the BSP and the Monetary Authority of Singapore are also discussing ways to facilitate data connectivity with respect to the operation of financial institutions across borders.

The Philippine central bank also continues to participate in the operationalization of the Chiang Mai Initiative Multilateralisation (CMIM), the regional financing arrangement that members of the Association of Southeast Asian Nations (ASEAN), China, Japan and Korea can draw upon in times of shocks.

The amended CMIM agreement, which came into force last June 23, offers a stronger currency swap arrangement and financial safety net.

Key features of the 2020 CMIM amendment include allowing greater flexibility for the financing of the facility linked with the International Monetary Fund (IMF) to ensure consistency with IMF-supported programs, strengthening coordination with IMF, and addressing legal ambiguities such as those that involve confidentiality of information.

Another regional facility is the ASEAN swap arrangement (ASA), which provide short-term foreign exchange liquidity support for members that may experience balance of payments (BOP) difficulties.

The BSP is also holding talks with international partners such as the ASEAN, Asian Development Bank, Bank for International Settlements and IMF to exchange ideas on the COVID-19 pandemic.