Finance Secretary Carlos Dominguez III has cited the substantial inroads made by the Association of Southeast Asian Nations (ASEAN) on a wide range of initiatives aimed at establishing a seamless financial system across the region.
Dominguez also said this regional bloc’s setting up of an ASEAN Infrastructure Fund (AIF) will benefit the Philippines and the rest of the organization’s member-economies by way of sustaining the momentum of their economic growth and creating more jobs for their peoples.
He said the ASEAN Finance Ministers Process (FMP), which is the tool to accomplish these goals, “is following through with several initiatives” to liberalize financial services and capital accounts, develop the region’s capital markets, set up a regional payments and settlements system, and establish the AIF to promote the use of regional savings in financing infrastructure development that will support connectivity across the region.
The FMP, which Dominguez is chairing this year, has also identified four areas of cooperation, namely, the ASEAN Insurance Cooperation, Cooperation in ASEAN Customs, Cooperation in Taxation and the ASEAN Countering Terrorism, Financing and Anti-Money Laundering.
Dominguez is automatically the FMP chairperson this year, as the ASEAN celebrates its milestone 50th anniversary, in view of the Philippines’ hosting of the ASEAN meetings and President Duterte’s chairmanhip of the ASEAN summit in November.
“Much work has been invested in laying the foundations for a seamless regional financial system to support the goal of a regional economic community. The envisioned regional economic community will enable all the member-states to build on each other’s strengths and pave the road to rapid growth,” Dominguez said at the recent “ASEAN at 50” forum held at the Manila Polo Club.
He likewise pointed out that, “The mechanisms of an ASEAN Economic Community (AEC) are being put in place with a great sense of urgency. All of us in this region understand that cooperation within the framework of the ASEAN gives our countries the best projects for meaningful economic development.”
Dominguez said regional integration is ASEAN’s “path to the future” that will “bring out the best of each economy” and enable the people of its member-nations to feel “the fruits of [such] effort.”
In his speech, Dominguez paid tribute to ASEAN’s founding fathers, whom he described as “men of exceptional vision” who foresaw a prosperous and high competitive economic region driven by a freer flow of capital and more equitable economic development.
“Today, the region is a much different place. The end of the Cold War paved the way for a more inclusive ASEAN, a framework that truly represents the whole region with all its disparities and differences,” Dominguez said.
He said the Philippines, as with the rest of ASEAN, stands to benefit greatly from the FMP as it is now enjoying increased access to financial services after member-states have agreed to larger allowable foreign equity in the banking, capital and insurance markets.
“Filipinos now enjoy greater access to financial services, including products and alternative financing mechanisms not yet available in the domestic market,” he said.
Dominguez said increased foreign equity participation in ASEAN’s financial services industry will help keep the region resilient against financial shocks and facilitate knowledge transfers as well as encourage companies to meet global best practices.
“We have observed that liberalization in the sphere of finance brings about a reduction in the cost of financial intermediation. The entry of foreign players leads to operational efficiencies. The resulting lower costs results in cheaper financing services and products available to Filipinos,” he said.
Dominguez said liberalizing financial services provides Filipinos with more choices insofar as financial products are concerned, which will help wean them away from “ostentatious consumption” and lead them towards savings and investment.
The liberalization of financial services also yields more job opportunities for Filipinos, while the AIF will provide the government with additional funding source for its infrastructure program, and the regionalization of payments systems and improved regional Customs cooperation “smoothen the way to higher trade flows for the country,” he added.
Highlighting the FMP’s productive initiatives under the Philippines’ chairmanship, Dominguez also cited the implementation of the Strategic Working Plans of the ASEAN finance ministers and central bank governors, and the efforts of the ASEAN Capital Markets Forum and the Working Committee on Capital Market Development (WC-CMD) to jointly pursue the creation of an interconnected, inclusive and resilient regional capital market.
He also noted the negotiations for the 8th Package of Financial Commitments, which will be ready for the signing of the 8th Protocol at the next meeting of ASEAN finance ministers and central bank governors in April next year, the continuing development and integration of the insurance sector in the region, and completion of the Roadmap for the ASEAN Insurance Integration Framework (AIIF).
According to Dominguez, the FMP is also continuing work on payment systems linkages, and interoperability, capital markets settlement and policy harmonization and standardization; and capacity building among the member states to foster a financial inclusion ecosystem, promote innovative digital platforms and increased financial education and consumer protection, among other initiatives.
He said the FMP also agreed to continue supporting the ASEAN Finance Ministers’ Investor Seminar as an important platform to communicate developments and outline future prospects for doing business in the region.
