The Bangko Sentral ng Pilipinas (BSP) and Bank Negara Malaysia (BNM) signed on April 6 in Mactan Island, Cebu the Declaration of Conclusion of Negotiations (DCN) on the entry of Qualified ASEAN Banks (QABs) between the two countries.
Signing the declaration in behalf of their respective institutions were BSP Governor Amando M. Tetangco, Jr. and BNM Governor Muhammad bin Ibrahim.
“Finalizing this agreement between the BSP and BNM is an important step towards achieving the goal of the ASEAN Banking Integration Framework (ABIF) to enhance intra-regional trade and inclusive growth through QABs operating in host ASEAN jurisdictions” said Governor Tetangco.
ABIF provides the general principles for the entry of QABs from one ASEAN member-state to another. The agreement signed by the BSP and BNM reflects the specific conditions for QABs from each jurisdiction to enter the other in a manner that is consistent with global banking standards and meets host jurisdiction regulations.
“The benefits of a harmonized ASEAN financial market are often cited and having QABs allows us to reap these benefits in concrete terms. The significance of this DCN then is that we are essentially opening to the two jurisdictions the envisioned upside of stronger cross-border finance,” Governor Tetangco pointed out.
This ABIF-related agreement between BSP and BNM will eventually be reflected in the respective Schedule of Commitment (SoC) of each country. The SOC reflects the final offers that each jurisdiction makes to a specific counterpart jurisdiction as well as offers that are made available to all jurisdictions.
Under the ABIF timeline, each ASEAN-5 country is to conclude at least one bilateral agreement with another ASEAN-5 country by 2018. The ASEAN-5 refers to Indonesia, Malaysia, Philippines, Singapore and Thailand. By 2020, ABIF targets the conclusion or near conclusion of at least one bilateral agreement for each of the ten ASEAN members.