In a landmark event held last August 19, 2024, the Bangko Sentral ng Pilipinas (BSP) and the National Bank of Cambodia (NBC) took a significant step towards strengthening their bilateral relationship by signing a Memorandum of Understanding (MOU) aimed at enhancing cooperation between the two central banks.
The signing ceremony, which was held in the historic city of Siem Reap, Cambodia, was led by BSP Governor Eli M. Remolona, Jr., and NBC Governor H.E. Dr. Chea Serey, marking a new chapter in the long-standing partnership between the two institutions.
Photo shows BSP Governor Eli M. Remolona, Jr. (left, seated), and H.E. Dr. Chea Serey (right, seated), Governor of the National Bank of Cambodia (NBC), during the signing of a Memorandum of Understanding (MOU) between the two central banks. Looking on are other members of the BSP and NBC.
MOU between BSP and NBC sets stage for more structured collaboration
The MOU sets the stage for a deeper and more structured collaboration between the BSP and NBC, building on years of mutual support and engagement on both bilateral and regional fronts.
This agreement not only reaffirms the commitment of the two central banks to work closely together but also provides a clear framework for future cooperation in various areas critical to their respective economies.
Following the signing, a high-level bilateral meeting was held, where the BSP and NBC shared insights and exchanged views on key issues impacting their countries’ financial and economic landscapes.
In a joint press release, the BSP said that the discussions covered a wide range of topics, including recent macroeconomic developments, financial outlooks, advancements in payment systems, and the increasing role of artificial intelligence and cybersecurity in banking.
Additionally, both parties emphasized the importance of sustainable finance, recognizing the need to align their financial systems with broader environmental and social goals.
One of the key outcomes of the meeting was the recognition of the growing importance of payment system connectivity and innovation.
Committed to fostering an environment that encourages innovation
As the digital economy continues to expand, both the BSP and NBC are keen to explore ways to enhance cross-border payment systems, making transactions more seamless, efficient, and secure.
Just recently, the BSP issued Circular No. 1198, which introduces a comprehensive Regulatory Framework for Merchant Payment Acceptance Activities (MPAA), to help enhance the security and efficiency of digital payment systems in the Philippines. This is particularly relevant given the rise of digital financial services, which have become increasingly vital in fostering financial inclusion and supporting economic growth in both the Philippines and Cambodia.
The MOU also underscores the central banks’ shared interest in digital financial innovation. As financial technology (fintech) continues to evolve, there is a pressing need for regulatory frameworks that can keep pace with rapid technological advancements.
The BSP and NBC are committed to fostering an environment that encourages innovation while ensuring that consumer protection and financial stability are maintained. By collaborating on this front, the two central banks aim to create a more dynamic and inclusive financial ecosystem that benefits all stakeholders.
Banking supervision is another critical area of cooperation outlined in the MOU. With the financial sector becoming increasingly complex, there is a growing need for robust regulatory oversight to ensure the stability and resilience of banking institutions.
The BSP and NBC have pledged to share best practices and expertise in banking supervision, which will help both institutions enhance their capacity to monitor and manage risks within their respective banking systems.
Recognizing the importance of building a skilled workforce
Human resource development also features prominently in the MOU, with both central banks recognizing the importance of building a skilled and knowledgeable workforce to navigate the challenges and opportunities of a rapidly changing financial landscape.
The BSP and NBC plan to collaborate on training programs, capacity-building initiatives, and knowledge-sharing activities that will equip their staff with the necessary skills to excel in their roles.
The MOU is not just a symbolic gesture but a concrete step towards closer collaboration that is expected to yield tangible benefits for both the Philippines and Cambodia.
By working together, the BSP and NBC can better address the challenges posed by a rapidly evolving global financial environment and leverage their combined strengths to promote economic stability, financial inclusion, and sustainable growth.
As the world continues to grapple with uncertainties, the BSP-NBC partnership serves as a model of how central banks can come together to foster cooperation and mutual support.
The signing of the MOU marks a significant milestone in the relationship between the Philippines and Cambodia, and both countries can look forward to a future of enhanced collaboration, innovation, and shared prosperity.