Phl clears entry of Asean banks

The Philippines is set to start talks with Thailand and Indonesia on the opening up of the banking industry aimed at greater financial integration and economic development among members of the Association of Southeast Asian Nations (ASEAN).

Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said in a speech during the general assembly of the Bankers Association of the Philippines (BAP) the negotiations with Thailand and Indonesia as part of the ASEAN Banking Integration Framework (ABIF) would start soon.

“I am pleased to report that we are about to initiate formal discussions with the Bank of Thailand and with the OJK of Indonesia under the same ABIF guidelines,” Tetangco said.

Last March, the BSP and the Bank Negara Malaysia agreed on the guidelines regarding the entry of qualified ASEAN banks between the Philippines and Malaysia under the ABIF.

Tetangco, and Bank Negara governor Zeti Akhtar Aziz signed the Heads of Agreement (HoA) in Kuala Lumpur last March 14. The pact between the BSP and Bank Negara was one of the first bilateral agreements to be signed under ABIF and marks a milestone within the broader ASEAN community.

ABIF aims to strengthen intra-regional trade and investments under the ABIF. The agreement with Malaysia allows up to three qualified ASEAN banks from each jurisdiction to operate in the other country.

ABIF is designed to realize the vision of “One ASEAN Community,” using these banks as the vehicle for maximizing the vast trade and investment potential of ASEAN.

The BSP chief said ASEAN banks should be mindful of the trend of “disruptive innovation” as they pursue supply chains and regional integration.

Tetangco said technological improvements are helping define new ways for ASEAN banks to enter into and be integrated in the supply chain.

“In doing so, there is a need to be mindful that using financial technology could lead to new and unanticipated financial, business, consumer protection risks as well as cybersecurity risks,” he said.

Tetangco said banks should pursue technology solutions with caution and without sacrificing financial stability and the protection of customers.

He explained Philippine banks are well positioned to support the country’s robust economic growth as the industry’s total resources grew almost three times to P13.1 trillion from P4.5 trillion over the past 11 years.