BSP prods local banks to expand into Asean

MANILA, Philippines — Philippine banks can start establishing presence in Southeast Asian countries over the next few years with the full rollout of the ASEAN Banking Integration Framework (ABIF) by 2020, the Bangko Sentral ng Pilipinas (BSP) said.

In a speech during an annual conference organized by Financial Executives Institute of the Philippines (Finex), BSP Deputy Governor Chuchi Fonacier said local banks can expand in Singapore, Brunei, Cambodia, Laos, Myanmar and Vietnam.

Under the timetable, each ASEAN-5 country should have concluded at least one ABIF arrangement by 2018 and by 2020, there should be the conclusion or near conclusion of at least one bilateral accord for each of the 10 ASEAN member states.

“We are currently on track with our ABIF commitments,” Fonacier said.

Fonacier said the BSP has concluded negotiations with Bank Negara Malaysia and is in talks with Bank of Thailand and Indonesia’s OJK.

“Under these ABIF agreements, Philippine Qualified ASEAN Banks (QABs) will be able to enter Malaysia, Indonesia, and Thailand and enjoy the same rights as local banks and vice versa,” she said.

Fonacier said the ASEAN banking integration, aimed at giving easier access to the banking sectors of other member states, brings many benefits and opportunities.

Fonacier said the presence of foreign banks in the Philippines has attracted foreign direct investments, facilitating $15.7 billion in financial transactions with other countries such as the US, Japan, China and Thailand in 2015.

Likewise, she added foreign banks contributed to the offering of a wide array of financial products and enhanced delivery of financial services by capitalizing on and enhancing existing banking technology and support systems for banks’ front and backroom operations.

According to Fonacier, the Philippines is ready for regional integration.

“While we are aware of the risks associated with banking integration, such as contagion, as well as financial and macroeconomic instability, we are confident that the Philippines is ready for integration and is able to manage and deal with potential risks,” Fonacier said.

She added the ABIF supports the ASEAN Economic Community through the free flow of goods, services, investment, and freer flow of capital.