‘Philippines plays important role in digital payments push’

In Southeast Asia

MANILA, Philippines — The Philippines is emerging as a key player in the Association of Southeast Asian Nations (ASEAN) ’s efforts to build a seamless, inclusive and secure cross-border payment system, according to the ASEAN+3 Macroeconomic Research Office (AMRO).

In a report titled “Powering Payments: The Role of Technology in ASEAN’s Regional Payment Connectivity Initiative,” AMRO highlighted how the Philippines’ growing adoption of fast and interoperable digital payments positions the country to benefit from and help shape the regional payment connectivity (RPC) initiative.

The RPC, first launched in November 2022 by five ASEAN founding members, including the Philippines, aims to make cross-border payments faster, cheaper, more transparent and more inclusive across Southeast Asia.

Since its inception, the initiative has expanded to nine ASEAN economies and is building linkages with India, Japan and Hong Kong. It promotes the use of QR codes, instant payment systems and local currencies for cross-border transactions, particularly benefiting small businesses and overseas workers.

“Technological innovation has played a pivotal role in enhancing regional payment connectivity. Specifically, technological advancements in cross-border transaction system have improved operational efficiency, while enhancing security, transparency, and trust across diverse financial networks,” AMRO said.

“These developments have been central to the establishment of the ASEAN RPC, paving the way for greater financial inclusion and economic development in the region.”

The Bangko Sentral ng Pilipinas (BSP) has been working closely with its regional counterparts under the initiative and is a founding member of Project Nexus, a multilateral effort with the Monetary Authority of Singapore, Bank Negara Malaysia, Bank of Thailand and the Reserve Bank of India to connect fast payment systems via a hub-and-spoke model.

While the Philippines has yet to operationalize a live payment link under the RPC, it is among the countries already compliant with ISO 20022 standards for real-time gross settlement and fast payment systems.

AMRO said that bilateral payment linkages have rapidly increased across ASEAN, with systems like Thailand’s PromptPay, Singapore’s PayNow and Malaysia’s DuitNow already connected.

However, the paper warned that a fully bilateral model is unsustainable in the long-term, as connecting each pair of countries would require 45 links.

To scale the system more efficiently, AMRO recommended adopting a centralized model like Nexus, which would allow the Philippines to leapfrog into broader regional integration while minimizing infrastructure costs.

The report also identified challenges, such as inconsistent anti-money laundering policies, incompatible APIs and fragmented consumer protections across jurisdictions. It called on ASEAN members to harmonize regulatory frameworks and adopt international standards, especially in data privacy, fraud detection and tax compliance.

AMRO also recommended that countries like the Philippines invest in advanced technologies such as artificial intelligence, machine learning and distributed ledger systems to enhance payment security, efficiency, and compliance.

Despite the challenges, the report praised the RPC initiative as a “landmark achievement” that could transform intra-ASEAN trade, remittance and tourism by lowering costs and increasing access to financial services. The Philippines, with its large overseas population and rapidly growing digital economy, stands to benefit significantly.

The report was authored by AMRO staff members Prashant Pande, Toàn Long Quách and Chiang Yong (Edmond) Choo.