MACTAN, CEBU - A development roadmap drafted by the Philippines is calling for measures to enhance financial integration, resiliency and transparency among members of the Asia Pacific Economic Cooperation (APEC).
But given the nature of APEC where adoption of initiatives are voluntary, the Cebu Action Plan (CAP), which will be formally launched here tomorrow (Sept. 11), will be non-binding, meaning it would be up to the member economies whether to put it into action.
Finance Secretary Cesar Purisima said the road map was "broad because it gives opportunity to put in a lot of specific initiatives."
"This is an attempt.. to really come up with a road map moving forward, to really support the trade agenda," he told ABS-CBN News.
All 21 APEC members economies are represented in the two-day high-level meeting that began today at the Mactan Shangri-la Hotel. But only eight finance ministers are in attendance.
Finance ministers from the world's top three economies--the United States, China, and Japan--were not around.
But Purisima said the public should not read much into it. He said he himself had missed similar meetings in the past due to other domestic engagements.
The 10-year CAP stands on four pillars—financial integration, fiscal transparency and reform, financial resiliency, and infrastructure development and financing.
As APEC host this year, the Philippines had the opportunity to determine the theme, which is focused on inclusive growth.
One opportunity under the CAP, Purisima said, was adopting an “equivalent” of the existing APEC Business Travel Card (ABTC) for Public-Private Partnership (PPP) initiatives in the region.
The ABTC allows short-term entry to member economies for businessmen without them having to individually apply for visas.
“If an Australian company has done PPPs in Australia, maybe they can get an APEC PPP card that will reduce their accreditation requirements when they go to another country such as he Philippine,” Purisima said.
“So that once accredited in another country, you simplify accreditation in another country.”
Infrastructure development and financing are important to further improve connectivity within the APEC region. They come in the form of efficient ports and road systems.
Citing an Asian Development Bank estimate, Philippine Treasurer Roberto Tan noted that as much as $800 billion was needed annually for infrastructure development.
“While our growth has also come with unprecedented infrastructure development, there are still significant gaps,” he said in a speech at the meeting of APEC finance and central bank deputies.
“We recognize the role the private sector plays in unlocking finance for infrastructure development. In particular, the (PPP) mode of financing is seen as a viable option. For this to materialize, bankable projects have to be identified in the pipeline and capital markets developed.”
Among the Philippines’ priorities as APEC host this year is promoting small and medium enterprises (SMEs) participation in regional and global markets.
One option that could be developed under the CAP is a credit information system that would rate borrowers.
“What we need to do is we create a market for securitizing their loans,” Purisima said.
“But to securitize their loans we need to be able to have credit rating for the borrowers so we can determine the risk of each of these package of loans.”
Another initiative under the financial integration pillar is the Asia Region Funds Passport (ARFP).
It seeks to facilitate the cross-border offering of managed funds within the APEC region.
"Basically funds that are sold in one country already will be allowed to be sold in another country," Purisima said.