Singapore’s CB head urges Asean integration vs Covid

Monetary authority of Singapore (MAS) Chairman tharman Shanmugaratnam is urging the association of Southeast asian nations (asean) to build regional integration and allow the small and medium enterprises (Smes) benefit from the opportunities.

the key, according to the head of singapore’s central bank, is digitalization.

“digitalization is fundamental to the way we help our smes in the next phase of growth,” shanmugaratnam said in a webinar hosted last tuesday by the standard Chartered Bank.

the Mas chief added that singapore is developing a platform that can link smes to buyers, suppliers, logistics providers and lenders, among others, in the region. he said this could ease the operations of smes which are importing and exporting goods and services.

“Fundamentally, we have now the opportunity on building a more resilient and more integrated asean supply chain... as well as asean markets that is opened to the world and become an example how through openness, integration and risk management of supply chains, we can really have a win-win,” shanmugaratnam said.

“Covid has brought major shocks; but we are now in the stage where we are looking at the next scenes of building back and also building stronger and more resilient out of Covid,” the singaporean official added.

Train, educate Luhut Binsar Pandjaitan, Coordinating Minister for Maritime affairs and investment of the republic of indonesia, agreed with shanmugaratnam’s view.

“if we can move together, within asean, we can [be] much stronger,” he said, noting that the region holds about 30 percent of the global market.

Pandjaitan said that the Covid-19 pandemic is an opportunity to “reform” relationships among neighbors.

he explained that out of 60 million smes in indonesia, only 8 million are connected through digital platforms. the indonesian official said they were eyeing to increase this to 11 million by the end of this year— through further integration via the digital space—which could translate into a 2,000-percent growth in sales.

While integration means more revenue channels, Pandjaitan said this could also spell reduction in cost, which is quite beneficial for emerging markets.

Meanwhile, both officials said it was only imperative to invest in human capital. they emphasized the need to train and educate the human capital as the asean and the rest of the world move into the new normal.

“Going forward, we have to double down on our efforts to invest in human capital. not just the … professionals ... [but also] blue-collared jobs,” tharman added.

Policy support standard Chartered Chief Executive Officer Bill Winters, meanwhile, acknowledged the efforts of central banks across the region in addressing liquidity concerns.

“We know the liquidity impacts in the financial system were dealt with quite aggressively early on and have been very effective,” he said.

in the Philippines, the Bangko sentral ng Pilipinas (BSP) has cut the key policy rate by a total of 175 basis points to 2.25 percent.

apart from this, the BSP also slashed the reserve requirements for banks to boost lending activities.

recently, the Monetary Board also approved the amendments of BSP to increase the real estate loan limit of universal and commercial banks and thrift banks to 25 percent from 20 percent. BSP Governor Benjamin E. diokno said that the ease in restriction translated to additional P1.2-trillion worth of liquidity for the property sector.