Finance chiefs finalize ASEAN bloc launch

MANILA, Philippines - Finance ministers from Southeast Asia gathered in Manila for the 10th Asean Finance Ministers’ Investors Seminar (AFMIS) to discuss current economic issues and put the finishing touches on the framework for regional integration that begins in 2015.

The seminar, held at The Peninsula Manila and which gathered the brightest minds in banking and finance, also served as a curtain raiser for the World Economic Forum on East Asia – a business event that will be held for the first time in the country on May 21 to 23.

Philippine Finance Secretary Cesar V. Purisima, who opened the morning session together with Myanmar Finance and Revenue Minister U Win Sheing, reiterated the benefits of ASEAN integration.

While the region is composed of fast growing economies, he said ASEAN will even be bigger with integration.

“Inter-ASEAN trade is growing rapidly. In the past three years, the growth of inter-ASEAN trade has outpaced the growth of world trade. That just shows the benefits of a more connected, more harmonized ASEAN, which, as a single country, would have the third largest population and a GDP of over $2 trillion,” Purisima said.

The Philippines’ finance secretary cited the tourism sector, expected to be one of the sectors to significantly benefit from an integrated regional economy.

“ASEAN, if it were one country, had 85 million tourists last year, outperforming France,” Purisima said.

During the summit, ASEAN finance ministers held a plenary session, to which private sector representatives were invited to respond. The latter were composed of the following: PIMCO senior vice president and emerging markets portfolio head Roland Mieth, Citigroup managing director and Asia-Pacific government affairs head Catherine Simmons, HSBC co-head of Asian economic research frederic neumann, Morgan Stanley co-head of Asia-Pacific investment banking Dieter Turowski, Standard Chartered Group executive director, and CEO Asia Jaspal Bindra.

Breakout panel discussions on energy, infrastructure, and tourism sectors were set in the afternoon and participated in by 24 government economic heads and prominent business personalities in the region.

The AFMIS also served as a venue for the finance ministers of the region to follow up on the results of the recent ASEAN Summit in Myanmar. Purisima said ASEAN leaders talked about the 2015 ASEAN integration and issues and opportunities that will come out of a more integrated ASEAN during the Summit.

Also discussed during the AFMIS was the Roadmap for Monetary and Financial Integration of ASEAN (RIA-Fin) that would key in financial integration within the region.

Among the programs being fine-tuned are the ASEAN Financial Integration Framework (AFIF), the ASEAN Banking Integration Framework (ABIF) and the ASEAN Payments and Settlements Systems.

Discussions also focused on the development of the ASEAN capital markets, while work is underway for the harmonization and mutual recognition of rules and regulations in the capital markets of member countries. The ASEAN Capital Market Infrastructure Blueprint already provided the guidelines for an integrated access, clearing, custody and settlement, in support of the ASEAN Trading Link.

The implementation of the ASEAN Infrastructure Fund (AIF) was also up for discussion. AIF is an integral component of ASEAN’s efforts to strengthen regional physical connectivity and narrow the infrastructure development gap in the region.

Customs cooperation was also up for discussion. Particular topic was the full implementation of the outstanding initiatives, including the finalization of agreements and protocols, to support the establishment of a single market and production base under the ASEAN Economic Community (AEC).

The finance ministers were set to thresh out double taxation concerns and withholding tax issues in the proposed AEC. 

Regional cooperation in dealing with international tax evasion and to collaborate with external parties to further enhance regional dialogue among regulators to complete a network of bilateral tax treaties also was up for discussion.

The AFMIS is expected to come up with an action plan to promote ASEAN as an attractive investment destination and to intensify policy cooperation and coordination in preparation for the ASEAN Economic Community 2015.

The AFMIS was organized by the Department of Finance with support from Citi, HSBC, Morgan Stanley and Standard Chartered Bank.