MACTAN, Cebu—Finance ministers of the Asia-Pacific Economic Cooperation (Apec) on Friday formally launched the Cebu Action Plan (CAP), a 10-year road map that aims to secure a “sustainable financial future” for the region.
The CAP, which will be submitted to Apec leaders, has four pillars: Promoting financial integration; advancing fiscal reforms and transparency; enhancing financial resilience; and accelerating infrastructure development and financing.
“The Cebu Action Plan that we launch today [Friday] is the work of a region facing forward in steadfast cooperation amid complex challenges and opportunities,” Finance Secretary Cesar V. Purisima said.
“We hope the CAP emerges as the lasting legacy of the Philippines’s hosting. With 21 economies, multilateral institutions and private-sector support behind it, we are optimistic the CAP can be taken in the next meetings as a living body of continuing work— in our bid for a more prosperous, financially integrated, transparent, resilient and connected Asia Pacific,” Purisima added.
The deliverables of the CAP include the reduction of average transaction costs for remittances to around 5 percent in the next 10 years. Dr. Alan Bollard, executive director of the Apec Secretariat, told the BusinessMirror that, in some parts of the region, average transaction cost for remittances is around 16 percent.
Lower transaction costs for remittances are expected to benefit migrant workers in Asia Pacific, including overseas Filipino workers.
Pushing to cut transaction costs for remittances is one of the targets identified under Goal 10 of the Sustainable Development Goals (SDGs), or reducing inequality within and among countries.
The target on remittances state that, by 2030, countries must reduce to less than 3 percent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 percent.
Apart from remittances, the CAP also included efforts to increase cooperation and transparency on information for public-private partnerships (PPPs).
PPPs are one of the main initiatives that the Apec wants to undertake to address infrastructure gaps in the region.
In May 2014 Asian Development Bank (ADB) East Asia Department Director General Ayumi Konishi said the infrastructure needs of Asia is expected to double to around $800 billion a year in the 2011 to 2020 period from around $400 billion a year in the preceding decade.
Konishi said, multilateral institutions like the ADB, the World Bank, International Finance Corp., and other existing organizations could only provide, at the most, $50 billion a year. This leaves around $750 billion worth of infrastructure projects that require funding until 2020.
“We will closely collaborate with the Global Infrastructure Hub to establish a PPP knowledge portal with the following possible preliminary contents: PPP infrastructure projects undertaken by Apec economies; directory of private firms, consultants, and experts involved in PPP infrastructure projects; and financial and legal, public and private risk mitigation instruments available to infrastructure investors in the region,” the Apec finance ministers said.
Meanwhile, six of the 21 Apec economies signed the statement of understanding on the Asia Regional Funds Passport (ARFP), which seeks to forge stronger and more streamlined connections in the financial markets.
The signatories are Australia, South Korea, New Zealand, Thailand, Japan, and the Philippines. By signing the
nonbinding agreement, the countries effectively expressed their intent to pursue the ARFP. The ARFP aims to establish a regional environment where operators of collective investment schemes, such
as mutual funds, based in a member-economy will be able to offer their products to investors in other participating members of Apec.