UAE, Philippines partner to target cheaper, faster remittances

By Aarav Garg

The Central Bank of the UAE and the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) have signed a memorandum of understanding (MoU) to deepen financial cooperation, with a particular focus on cross-border payments and digital finance infrastructure.

The agreement outlines plans to enable more seamless cross-border transactions by linking the two countries’ instant payment systems. It also includes the potential future integration of national card switches and financial messaging systems, aimed at improving interoperability, reducing settlement times and lowering transaction costs. In addition, both central banks will exchange expertise on the development of central bank digital currencies (CBDCs) for retail and institutional use.

The initiative reflects a broader global push to modernise cross-border payments, which have historically been characterised by high costs, long settlement times and reliance on intermediary banks. According to the World Bank, the global average cost of remittances remains above 6%, with higher costs in certain corridors. Efforts led by central banks and international bodies increasingly focus on linking domestic fast payment systems as a way to improve efficiency.

The collaboration between the UAE and the Philippines is particularly significant given strong remittance flows between the two countries. The Philippines is one of the world’s largest recipients of remittances, while the UAE hosts a sizeable Filipino expatriate population, making efficient payment channels a key economic priority.

Khaled Mohamed Balama, Governor of the Central Bank of the UAE, said, “This agreement marks a significant step toward building a more connected and innovative financial ecosystem between the UAE and the Philippines. By leveraging advanced payment technologies and sharing expertise, we are laying the foundation for a new era of seamless integration and sustainable, innovation-led economic growth.”

Beyond payments, the MoU also covers cooperation in areas such as open finance, digital assets and Islamic finance. These areas are gaining prominence as regulators seek to balance innovation with financial stability.

Dr. Eli M. Remolona, Jr., Governor of the Bangko Sentral ng Pilipinas, said, “This partnership supports the BSP’s push to digitalise payments and make cross-border transactions more efficient. For Filipinos in the UAE, especially our overseas Filipino workers, this means better remittance channels and more efficient financial services for their families back home. We also see strong opportunities to collaborate in Islamic banking and finance as we work toward a sound and inclusive financial ecosystem.”

The agreement highlights how bilateral partnerships are becoming an important mechanism for advancing cross-border payment connectivity. It also aligns with broader international initiatives, including work by the Bank for International Settlements, to enhance the speed, cost and transparency of global payment systems.