COME September, finance ministers from Asia Pacific Economic Cooperation (Apec) member-nations will be in Cebu for the three-day Finance Ministerial Meeting to firm up a road map that the Philippines is proposing to make the region more inclusive.
Deputies from finance ministries and central banks of Apec nations met in Tagaytay recently to fine-tune the Cebu Action Plan, a plan to make Apec member-nations more financially integrated, transparent and resilient.
The plan is anchored on four pillars: promoting financial integration, advocating financial transparency, enhancing financial resiliency, and supporting infrastructure development and financing. The plan will officially be launched during the Apec Finance Ministers’ Meeting in Cebu.
This year, the Philippines is hosting the Apec Summit and the country has chosen inclusivity as an agenda to make economic growth instrumental in reducing poverty, a report posted on the Apec 2015 Philippines website stated.
“Financial interconnectivity of Apec member-economies and their close linkages in the global financial markets make the region exposed to the risk of a global market liquidity dry-up and other market volatilities. As such, Apec economies must also build buffers to protect it from these financial market disturbances,” Philippine Treasurer Roberto Tan was quoted as saying during the opening remarks of the deputies’ meeting.
According to the website, efforts to boost inclusivity and economic resiliency are ongoing across the region, but delegates agreed that more needs to be done.
For the Philippines, regulations that improve accessibility of credit to micro, small and medium enterprises, and increases in allocations for social services are some of the responses to the call for a more inclusive economy. Efforts to improve macroeconomic fundamentals helped ensure resiliency of the domestic economy at the height of the recent global crisis.
The Philippines first introduced the road map for discussion during a meeting of senior finance officials held in Clark, Pampanga last January.
In a seminar for regional media sponsored by the US Embassy Manila last month, Philippine Finance Undersecretary Gil Beltran presented to reporters important points of the Cebu Action Plan. During that presentation, he said the plan hopes to make Apec economies have harmonized policies, rules and practices that enable and facilitate free trade and free flow of cross-border investments; and provide low-income households, micro, small and medium enterprises (MSMEs) and the unbanked access to financial services in 10 years.
At the meeting in Tagaytay, he said the Cebu Action Plan’s pillars are grounded on the Philippines’ growth story.
“The Cebu Action Plan is designed to power our shared future with the right foundations: the growing populations of our member economies stand to benefit from a more open, transparent, and resilient region with the infrastructure it needs to sustain inclusive growth trajectories.”
The pillar on financial integration seeks to liberalize trade and cross-border investments by developing supply chain financing for MSMEs that are linked to the Asia-Pacific supply chain, formulate and adopt policies to create an enabling environment for the sector to join the financial mainstream, and gradually remove restrictions on foreign exchange transactions, foreign direct investments, portfolio investments and other flows.
The pillar on fiscal transparency and policy reform seeks to make data on government finances more accessible to the public. To allow for greater scrutiny, the plan seeks the reporting of all government revenue, expenses and borrowings at all levels. It also calls for the establishment of linkages between investor ID systems, exchange of information by tax authorities and avoiding tax leakages arising from cross-border flows.
The pillar on financial resiliency pushes for initiatives that will deepen financial markets so economies become more resilient to shocks. This means creating buffers against global market volatilities, economic contagion effects and natural disasters by improving the mobilization of the public sector’s resources and establishing links between financial regulators, stocks and bonds markets, credit information bureaus, collateral registries and PPP (public-private partnership) knowledge portals.
On the pillar on infrastructure development and financing, the plan calls for enhancing regional connectivity, promoting knowledge and information exchange on PPP projects and the development of templates that member economies can use.
Finance and central bank deputies discussed the specific measures to be undertaken to achieve the four pillars. These measures will be presented to their finance ministers for approval.