Asia-Pacific economies urged to hasten financial integration

MACTAN ISLAND, Cebu, Philippines – Asia-Pacific economies should hasten financial integration efforts to increase trade activities and investments, National Treasurer Roberto Tan said.

In his opening remarks during the Asia-Pacific Economic Cooperation (APEC) finance and central bank deputies’ meeting, Tan said the region’s growth is largely dependent on trade and investment linkages with other member economies.

“Given this, it is imperative for APEC to further advance financial integration as a driver for intra-regional trade and investment,” Tan said, noting the region currently accounts for 57 percent of global production.

“For example, the geographical fragmentation of the supply chain presents vast opportunities for SMEs (small and medium enterprises) to increase participation in the regional and global trade,” Tan said.

He added reducing the cost of sending remittances and supporting financial literacy efforts would also promote financial integration.

APEC Financial Ministers are set to unveil today (Friday) a 20-year roadmap dubbed as the Cebu Action Plan which focuses on four pillars: financial integration, fiscal transparency and policy reform, financial resiliency, and infrastructure development and financing.

Tan said the gains achieved by the region could be further be enhanced by implementing various fiscal reforms and transparency.

“Fiscal reforms and transparency not only help ensure fiscal sustainability but also makes fiscal policy more effective, efficient, and responsive,” Tan said.

He said since APEC member economies are always at risk of being hit by natural disasters such as typhoons, earthquakes, and even tsunamis, there should be safety nets put up to protect the region’s fiscal resources.

“These disasters have a significant implication for public financial management… Given this alarming threat, it is critical that APEC economies work together to create means and safeguards against shocks to fiscal resources from natural disasters and other unpredictable events,” Tan said.

Officials and private sector representatives from APEC member economies have been working on the Cebu Action Plan since the start of the year.

APEC senior financial officials already approved a draft of the roadmap last Wednesday and this was forwarded to financial and central bank deputy ministers yesterday for endorsement.

Financial industry players also flew in to Cebu yesterday to join the discussion on the Cebu Action Plan before financial ministers from the region officially unveil the final copy of the initiatives on Friday afternoon.

Executives from Citigroup, JP Morgan Chase, Standard Chartered Bank, Goldman Sachs, ING, Barclays Investment, Deutsche Bank AG, and HSBC, among others were present for the two-day event with financial sector representatives here in the province.

“As we begin to bring to a close one year’s worth of extensive and fruitful discussions through the finalization of the CAP, we realize that this is not the end but simply the beginning of a brighter future for all APEC economies,” Tan said.