MANILA, Philippines - Local banks have much to do yet to meet commitments sought under the financial integration program of the Association of Southeast Asian Nations (Asean) set for full implementation by 2020, bank executives across the region told a press briefing organized on Tuesday by the Asian Bankers Association.
Integration pertains to ongoing efforts by Asean members to achieve parity of rules and regulation across the 10 countries of the Asean initially for example so that banks in the region can begin to operate not as foreign banks but as local banks in any of the 10 Asean jurisdictions.
But according to Elbert Zosa, former executive vice president and head of corporate planning at the Rizal Commercial Banking Corp., while Philippine banks continue to endeavor to meet the various commitments needed to put the industry on even footing with colleagues in the region by then, the collective state of readiness has much to go still. Zosa remains a consultant with the bank.
“That is why Philippine banks still have ample time to prepare for the eventual integration,” Zosa said.
Bangko Sentral ng Pilipinas Gov. Amando M. Tetangco Jr. whose speech at the 29th general meeting and conference of ABA on Tuesday was read by Deputy BSP Gov. Nestor Espenilla Jr., said the Asean banking integration framework (ABIF) was seen to be fully on stream by 2020.
“Under ABIF, organically Asean banks can operate as ‘foreign bank’ branches in each of the 10 Asean member jurisdictions. These organically Asean banks are referred to as qualified Asean banks (QABs) and the premise is that these QABs operate under the same regulatory conditions as domestic banks.
“Parity across jurisdictions is likewise proposed under the ABIF so that banking becomes ‘cost and policy neutral’ between one Asean jurisdiction and another. This literally suggests a harmonized regulatory framework across the 10 Asean jurisdictions.
“A capacity building program underpins the entire framework. Under the rallying call of ‘Asean for Asean,’ there will be principally a transfer if experience and competencies from the original Asean 5 economies to the five newer members of Asean. Given how different the banking conditions are within Asean itself, one can only imagine how extensive will be this capacity building program,” Tetangco said in welcoming the various delegations to the ABA meeting held at the Makati Shangri-la Hotel.
He also said the big challenge was for all jurisdictions to build a holistic and robust Asean market.
“Though delimited to 10 economies, the extent of change that is needed is nothing short of massive, particularly if the plans are to materialize by 2020,” Tetangco said.