The first six months of the Duterte administration in 2016 was a year of heightened efforts by the Department of Finance (DOF) toward regional integration with our Asian neighbors and the pursuit of its advocacies on financial inclusion in tandem with both international and local development partners.
A defining moment in the government's quest for greater regional unity was President Duterte's directive to his Cabinet during his four-day visit to Beijing on the swift pivot to integration with the member-economies of the Association of Southeast Asian Nation (ASEAN) and our trading partners South Korea, China and Japan.
In Beijing last October, Finance Secretary Carlos Dominguez III and Socioeconomic Planning Secretary Ernesto Pernia, who were part of the President Duterte's delegation on his state visit to China, jointly announced that while the Philippines will maintain its good relations with Western economies, it will now push for "stronger integration" with its neighbors in the region.
"The Cabinet will move strongly and swiftly towards regional economic integration. This is why the President prioritized foreign trips to ASEAN and Asia," said Dominguez and Pernia in a joint statement issued while they were still with the President in China.
"We will maintain relations with the West but we desire stronger integration with our neighbors. We share theculture and a better understanding with our region," Dominguez and Pernia said.
The move, they said, will open for the Philippines countless opportunities for trade and investment in amarket of 1.8 billion people across the region, especially now that other ASEAN economies have also committed toward integration and China has pledged to open its capital markets..
ASEAN groups the Philippines, Malaysia, Singapore, Brunei, Thailand, Indonesia, Laos, Cambodia, Myanmar and Vietnam.
In line with the government's continued efforts to help develop the ASEAN Economic Community, the DOF delivered on the Philippines' commitment to expand market access in thebanking and securities sectors for the 10-nation ASEAN bloc.
"The Philippines' Seventh Package of Financial Services Liberalization Commitments is expected to widen access to financial services and products for Filipinos, diffuse advanced financial services practices and technologies from major ASEAN financial markets such as Singapore, and create more jobs in the financial services sector," the DOF said.
The DOF, as chair of the ASEAN's Working Committee on Financial Services Liberalization (WC-FSL), serves as theoversight body to the Financial Services Annex (FSA) of the ASEAN Trade in Services Agreement and the ASEAN Insurance Forum (AIFo).
"Under the stewardship of the DOF, the drafting of the FSA, which outlines the commitments in the financial services sector for ASEAN, has seen commendable progress, with only a few more articles still pending consensus from the ASEAN member states," the DOF said.
The AIFo, which serves as a venue for ASEAN stakeholders to work together toward the integration of the bloc'sinsurance sector, is another vital area that the DOF is working on as the high vulnerability of the Philippines and the other ASEAN states to natural disasters makes the integration in catastrophic risk insurance a priority concern.
"Insurance integration in the region also provides support to trade in the form of Maritime, Aviation, and Goods in Transit (MAT) Insurance," the DOF noted.
The Department is also the chair for the Sub-Working Group on Financial Services that will help realize theenvisioned Regional Comprehensive Economic Partnership (RCEP), which consists of the ASEAN members plus Australia, China, India, Japan, New Zealand and South Korea.
The DOF-led Sub-Working Group discusses commitments in the financial services sector for the RCEP, which ispotentially one of the largest free-trade-areas in the globe, accounting for about 30% of world GDP.
Another area that the DOF spearheaded in 2016 was the Cebu Action Plan, which "seeks to generate concrete cooperative outputs among member economies of the Asia-Pacific Cooperation (APEC) and partner international institutions in implementing initiatives on financial integration, fiscal transparency and reforms, financial resilience and infrastructure financing."
The DOF continued to follow through on its efforts of promoting financial inclusion across the Asia-PacificCooperation (APEC) region through the hosting of two conferences for the Financial Infrastructure Development Network in Manila in 2016.
In 2016, the DOF-National Credit Council (NCC) continued its advocacies on financial inclusion by teaming up with government regulators and concerned agencies, private institutions such as insurance companies and brokers, and donor partners that include the International Finance Corporation-World Bank (IFC-WB), Asian Development Bank (ADB) and German Technical Cooperation (GIZ)] on various projects towards inclusive growth.
These include partnering with the Insurance Commission on setting up a Health Microinsurance Framework, whichaims to offer affordable health microinsurance products to low-income groups.
"The health microinsurance project complements PhilHealth and would cater to the poor by providing them with insurance coverage that would, for instance, include 30,000 assistance for emergency room confinement for only two pesos a day equivalent to a PHP750 annual fee," the DOF said.
It also partnered with other government agencies in developing plans to address the challenges faced by private insurance firms in developing agriculture-based microinsurance products.
The DOF likewise led efforts to conduct financial literacy workshops on microinsurance and develop microinsurance distribution channels.
In implementing reforms on secured transactions, the DOF-NCC and Land Registration Authority (LRA) teamed up with the IFC-WB in harmonizing the Philippine Chattel Mortgage Law and other related status on secured transactions.
"This project broadens the utilization of movable assets as collateral for loans by micro- small and medium enterprises (MSMEs) thus, increases access to credit of micro enterprises," the DOF said.
The project led to the filing of counterpart bills in the Senate and the House of Representatives that aimto strengthen the Secured Transactions Legal Framework in the country.
"The DOF-NCC also continues to explore possible areas of collaboration with donor partners that are geared towards inclusive growth. The ADB, Japan International Cooperation Agency (JICA), GIZ, and Economic Research Institute for ASEAN and East Asia (ERIA) have recently signified interest to support more financial inclusion initiatives of the government through technical assistance," the DOF said.
Source: Philippines News Agency