Implementation of measures meant to prepare the country for the Asean integration in January 2016 is well on track and is nearing its completion as of end-2014, the Bangko Sentral ng Pilipinas (BSP) reported.
In its 2014 Annual Report, the central bank said the country has implemented 86.1 percent of all Asean Economic Community (AEC) measures, ahead of the regional average of 80.7 percent.
Among the key factors that the country has been working on is the enhancement of competitiveness to improve the Philippines’s business environment; develop local industries; promote intensive communication with stakeholders to deepen the awareness and understanding of the AEC; and effective collaboration among stakeholders.
But, while the country has exceeded the Asean implementation rate average of 80.7 percent of all AEC measures targeted, in terms of the financial regional integration —which aims to have a semi-integrated financial market by 2020—there is still a lot to be done. The AEC integrates the region in terms of flow of products
and services into a single market under a single production base.
The Asean Financial Integration Framework, meanwhile, is a component of the entire AEC blueprint, involving the liberalization and integration of financial markets through the removal of restrictions on capital markets and other financial services. These include banks, insurance companies, investment companies and other financial institutions.
In the same report, the BSP said a lot of things need to be done this year up to 2020 in advancing the financial integration. Most of these measures need to be worked on this year, based on the given timetable in the BSP’s report.
Among the actions that are set to be worked on this year include the environment and treatment for qualified Asian banks, or banks that are allowed to operate in other jurisdictions in the region aside from its home base country; the process of financial-services liberalization; capital-market development; and harmonization of payments and settlements system.
“The potential contributions to lowering of banking costs and improving efficiency and mobility of services offers an opportunity for Philippine banks to develop potential tie-ups and strategic alliances to find better ways to expand their reach,” the central bank said.
“However, concerns emerge on financial-stability risks and the need to put the domestic industry on an equal footing with regional counterparts. The concern emanates from the observation that Philippine banks are small and might not be able to compete with bigger players in the region,” it added.
Amid these, the BSP said the local scene remains ready for measures for the banking and financial integration under the AEC.