The Philippines and Australia have signed a memorandum of understanding to establish a "Work and Holiday" visa arrangement, allowing nationals of both countries to work while on vacation to cover costs, Malacañang said on Sunday.

In a statement, Malacañang said Australian Prime Minister Anthony Albanese signed an MoU during his official visit to the Palace on Friday as part of his official visit to the Philippines.

In a seven-page MoU signed by Foreign Affairs Secretary Enrique Manalo and Australian Ambassador to the Philippines Hae Kyong Yu, Malacañang said both countries agreed to award multiple entry visas allowing individuals to work for up to one year.

Eligible participants from both nations will receive a 12-month "Work and Holiday" visa to work in the host country under the MoU.

Filipino and Australian nationals aged 18 to 31 who are tertiary education graduates or have completed at least two years of undergraduate or post-secondary education can apply for a work and holiday visa. Health, character, national security criteria, and medical and health insurance for their stay are required.

Eligible nationals can leave and re-enter the host country using the same visa for 12 months from the first entrance.

Nationals under the arrangement must follow host country rules and regulations while staying.

"The Participants mutually decide to establish a 'Work and Holiday' visa arrangement, to allow nationals of both Participants to stay in the territory of the other Participant for the primary purpose of a holiday, during which they may undertake work to supplement the cost of their stay," the MoU read.

"Each participant may deny any particular application for a 'Work and Holiday' visa it receives, in accordance with its domestic laws and regulations," it added, referring to the Philippines and Australia as participants.

Applicants must pay any fees associated with the visa application.