TWENTY-ONE member-economies of the Asia-Pacific Economic Cooperation forum signed in support of the Cebu Action Plan that led to its launching at 4 p.m. yesterday in Lapu-Lapu City.
The Cebu Action Plan (CAP) is a 10-year roadmap that seeks to promote policies, rules, and practices across APEC economies to support “sustainable and inclusive” growth.
“We are here together to agree on a regional, collaborative action agenda for a sustainable financial future,” Apec Finance Ministers’ Meeting Chair and Philippine Finance Secretary Cesar Purisima said during a press briefing.
The CAP consists of four pillars: (1) promoting financial integration; (2) advancing fiscal reforms and transparency; (3) enhancing financial resiliency; and (4) accelerating infrastructure and development and financing.
During the launch, the finance ministers of China, Philippines, and Peru unveiled the CAP commemorative marker that resembles a balanghai, a wooden boat used in fishing and trade in pre-Spanish times. It was likened to a “vessel that binds various cultures and peoples together in shared prosperity” and “the ever freeing flow of investments and people among APEC economies.”
Crafting the CAP began in January, with meetings of APEC finance officers held in Clark, Pampanga; Tagaytay; Bacolod; Bagac, Bataan; and Iloilo before their final stop in Cebu.
Pillars
Under each of the four pillars, Purisima said there will be initiatives that the 21 finance ministers will each try to accomplish.
Some initiatives under financial integration include enhancing MSME (micro, small, and medium enterprises) financing, sharing of financial inclusion and literacy strategies, and reducing remittance costs.
In the areas of fiscal reform and transparency, the CAP commits to improve fiscal data reporting of state revenues, expenditures, and borrowing. This also covers promoting good tax processes, and improving the effectiveness of public investments.
Initiatives under financial resilience, CAP’s third pillar, involve the creation of measures against shocks to fiscal resources, the development of innovative disaster risk financing and insurance mechanisms, and deepening capital market development to create more facilities for risk transfer.
In the area of infrastructure development and financing, goals include attracting private sector investments for Public Private Partnership (PPP), mobilizing long-term infrastructure financing, and urban development infrastructure.
Non-binding
“It is (CAP) non-binding, which allows us to integrate ideas so we can accelerate advancing the region’s progress,” Purisima said.
This means future hosts, like Peru in 2016, will have the opportunity to shape the CAP, and set the priorities during their year and adjust the initiatives and deliverables.
The CAP, according to the official, is a continuation of the progress made in the Bogor Goals of free and open trade investment. That goal was formulated in Bogor City in Indonesia in 1994.
“We will work closely with our colleagues from Peru, the next APEC host, to make sure that there is proper turnover,” Purisima assured.
Peru Deputy Minister Enzo Defilippi said his country will focus on infrastructure and financial inclusion, especially MSMEs’ access to finance.
Hiroyuki Suzuki, chair of the Asia-Pacific Economic Cooperation Business Advisory Council (ABAC), said he is optimistic of the success of the CAP.
“I’m optimistic because we have a combination of developed and developing countries working together towards the same goal,” Suzuki said.
The participation of the private sector in the formulation of the CAP was also emphasized. Their participation, according to APEC finance ministers, will be beneficial as the initiatives and deliverables revolve around financing.
“I applaud the engagement of the corporate side in the Cebu Action Plan. I hope this continues in Peru,” said Steven Dekrey of the Asian Institute of Management.
Present during the finance ministers’ meeting on Sept. 10 were the executives of Citigroup, JP Morgan Chase, Standard Chartered Bank, Goldman Sachs, ING, Barclays Investment, Deutsche Bank AG, and HSBC.
“The Cebu Action Plan is a journey and we must not lose sight of its vision and the benefits that it will bring,” Purisima said.
Challenges
APEC contributes 60 percent of global production and 47 percent of global trade.
It was a busy day for APEC’s finance ministers, who had five sessions for the last day of the finance meetings, ending with the crafting of their official statement on the CAP.
Purisima said that 18 years ago, when the Philippines last hosted the APEC meetings, the finance ministers also met in Cebu.
He told participants that Cebu is the country’s oldest city and is historic for being the last stop of Portuguese explorer Ferdinand Magellan’s circumnavigation. He added Magellan’s expedition may also have been the first time Trans-Pacific trade became possible.
For officials of the International Monetary Fund, the CAP is addressing many economic challenges that both advanced and emerging economies face.
In a media briefing with reporters, IMF Director Odd Per Brekk and Deputy Managing Director Mitsuhiro Furusawa lauded the Philippines for its well-performing economy, credited mostly to the country’s macroeconomic environment.
With the global economy not growing as quickly as expected, they noted that the CAP comes at the right time to face market challenges.
“The main challenge facing both advanced and emerging markets at this point is to stimulate growth, both in the short term and long term…the CAP is addressing some of these issues,” said Brekk.
Furusawa believes the CAP is one of the good outputs from the APEC finance ministers’ meeting, and congratulated the Philippine government for taking the initiative.