(Eagle News Service) — The ASEAN integration economic blueprint envisions the establishment of a single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy. Among components identified are improved market access within the region, investment facilitation, establishment of a single aviation market and financial integration. Financial integration involves the banking sector and the financial markets.
In this connection, there is a need to look into the condition of the Philippine banking sector and financial markets.
In this issue of ASEAN in Focus, Development Academy of the Philippines (DAP) chairperson, Dr. Cayetano Paderanga, one of the foremost economists of the country, tackles the challenges of the ASEAN economic integration. DAP executive fellow Dr. Carlos Tabunda Jr., who is also ASEAN in Focus’ resident ASEAN resource person, interviews Dr. Paderanga in this episode.
Paderanga is also the former director of the National Economic and Development Authority (NEDA) and former socio-economic planning secretary. He is also a former member of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP).
“In some sense, you’re never ready for change. ASEAN economic integration will change some of the fundamental ways by which we do busines or trade with our ASEAN neighbors,” Paderanga said in this ASEAN in Focus interview.
“In that sense, many people would rather stay with the status quo, stay in their comfort zones. But at the same time, there is a lot of promise in having a much bigger market, having more access to resources, and this is the promise of ASEAN economic integration,” Paderanga stressed.
The DAP chairman also said that while the ASEAN integration in 2015 is inevitable, the threshing of the details is important for the country to fully prepare for this.
“The way we do things at the ASEAN, we agree to agree. And I think that the agreement to agree has already been done, we are now working on the details. We would like to bring our relationship with our neighbors at the economic level on a higher plane and this is what everybody is looking forward to,” he said.
Paderanga also explained that financial integration under the ASEAN integration environment would mean that funds, including capital, could now “flow more easily across borders.”
This will involve several levels – long term capital funds and foreign direct investments, short term funds, trading funds. With financial integration, this means that people can deposit in other countries much more easily.
He said that changes in the regulation of the central bank would also have to be disccussed with the other standards in the region.
Paderanga also stressed that there would be “transition costs” which the country should prepare for.
“For our own domestic investors, everybody including the government will have to do things at a faster rate,” said the former monetary board member of the BSP.
Paderanga noted that Philippine banks are smaller, which also reflect the usual size of Philippine companies. He said all these are “related to the size of our capital markets” as well as the resources that we are able to utilize. He said this could actually improve with the country opening up.
“We should really move fast,” said Paderanga who also explained that in the end, the people, the consumers would get the most benefit with the upcoming ASEAN integration.
“If we are able to do things right, the whole basis for going into this is that in the end, it will be better for everybody. In fact, business will become stronger. For the people, for the consumers, there will be more variety of goods and there will be better quality, lower prices, because now you have many choices,” he said.
This series and the program ASEAN IN FOCUS of NET 25 (Monday to Friday, 2:00 p.m. to 2:30 p.m., with replays 11:00 p.m. to 11:30 p.m.) is part of Eagle Broadcasting’s advocacy to promote awareness about the ASEAN region and the 2015 ASEAN integration. ASEAN in Focus features news and features about the ASEAN region and the ASEAN integration process, and includes interviews of noted resource persons who share their views about the ASEAN integration process.
ASEAN in Focus is hosted by Alma Angeles, Neah Mangawang and Rachel Martin.
