ASEAN bloc commits to financial integration

CEBU, Philippines - The Association of Southeast Asian Nations (ASEAN) looks to further move up the financial integration in the region.

Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said Friday the regional bloc commits to integrating its financial system over the long-term as ASEAN central bank governors discussed yesterday the direction towards the goal. 

"We have renewed to our commitment to AEC (ASEAN Economic Community) 2025, setting the direction of the region in next 10 years and the goal towards financial integration," Tetangco told the 3rd ASEAN Finance Ministers and Central Bank Governors Joint Meeting yesterday at the Shangri-La's Mactan Resort and Spa.

The BSP chief said the central bank had initiated bilateral talks with its ASEAN counterparts since the ASEAN Banking Integration Framework was singed in 2014.

He said a technical working group had also been established to accelerate financial inclusion, which is deemed vital in realizing financial integration and inclusive growth in the region.

Tetangco said that during a meeting in Vientiane, Laos in 2016, strategic plans were endorsed for the AEC 2025, with a focus on the specific key pillars to financial integration, inclusivity and stability.

He said supporting initiatives were likewise endorsed to boost banking, insurance, capital market development, infrastructure financing, and bank liberalization, among others.

Finance Secretary Carlos Dominguez III said the joint meeting yesterday went on to discuss the progress of the AEC blueprint, the monetary and financial integration roadmap, and results of the ASEAN Finance Ministers Investor Seminar.

Some global finance institutions also briefed delegates of the meeting on global and regional economic outlook.

On Thursday, the BSP and central banks of Thailand and Malaysia moved towards integrating the banking systems of the three countries following the signing of agreements.

The BSP and Bank Negara Malaysia (BNM) signed the Declaration of Conclusion of Negotiations (DCN) on the entry of Qualified ASEAN Banks (QABs) between the two nations. The agreement allows QABs, which are strong and well-managed banks and are based in ASEAN, to set up shop in other territory and are treated as domestic banks.

“Finalizing this agreement between the BSP and BNM is an important step towards achieving the goal of the ASEAN Banking Integration Framework (ABIF) to enhance intra-regional trade and inclusive growth through QABs operating in host ASEAN jurisdictions” Tetangco earlier said.

Tetangco and Bank of Thailand (BoT) Governor Veerathai Santiprabhob also signed a Letter of Intent (LOI) to begin bilateral discussions in line with the ABIF.

ABIF enjoins each ASEAN-5 country is to conclude at least one bilateral agreement with another ASEAN-5 nation by 2018. The ASEAN-5 refers to Indonesia, Malaysia, Philippines, Singapore and Thailand. By 2020, ABIF targets the conclusion or near conclusion of at least one bilateral agreement for each of the ten ASEAN members. (FREEMAN)