MANILA-- ASEAN Leaders welcomed the latest development on banking integration in the region, citing that this will further ease trade facilitation within the 10-nation bloc.
We are pleased with the signing of the agreement between Indonesia and Malaysia and the completion of negotiations between Malaysia and the Philippines under the ASEAN Banking Integration Framework, the Chairman's Statement, issued Sunday, after the 30th ASEAN Summit in Manila, said.
The agreements were inked during the 21st ASEAN Finance Ministers' Meeting (AFMM) and the 3rd ASEAN Finance Ministers' and Central Bank Governors' Meeting (AFMGM) held in Mactan, Cebu in the first week of April.
Last April 6, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. and the Bank Negara Malaysia (BNM) Governor Muhammad bin Ibrahim signed the Declaration of Conclusion of Negotiations (DCN) that allowed qualified ASEAN Banks (QABs) to easily enter the two jurisdictions.
Tetangco was earlier quoted as saying that the DCN is an important step towards uncovering the synergies of cross- border finance between our jurisdictions.
The deal will provide prospects for banks from the two countries on where to effectively focus their operations in the foreign country.
This is something that will promote trade and investment between the two countries and share of experiences between two banking systems, Tetangco said.
QABs are domestically-strong banks that are allowed to operate in other ASEAN jurisdictions upon the endorsement of the regulator in its country of origin.
In March 2014, officials of the two central banks inked the Heads of Agreement (HoA) for the entry of their respective QABs in each other's jurisdictions under the ASEAN Banking Integration Framework (ABIF).
QABs are allowed to operate in the foreign country under the policies of the country they plan to establish operations in.
Under HoA, only three QABs of a country are allowed to operate in a foreign jurisdiction in the form of a subsidiary of its parent bank.
The ASEAN Chairman's Statement also welcomed the signing of agreements among Indonesia, Malaysia, and Thailand on the settlement of trade in domestic currencies to promote the use of local currency in facilitating intra-ASEAN trade and investment.
We noted the progress of the ratification of the Protocols to implement the Sixth and Seventh Packages of the ASEAN Framework Agreement on Services and looked forward to the signing of the Eighth Protocol in 2018, in line with the vision of progressive financial services liberalization, it added.
Source: Philippines News Agency