PH eyes another bilateral deal under Asean framework

The Philippines is eyeing one more bilateral deal that will lead to the establishment of qualified Asean banks (QABs) in another neighboring country, a ranking official of the Bangko Sentral ng Pilipinas said.

BSP Deputy Governor Nestor A. Espenilla Jr. also disclosed to reporters that at least one Malaysian bank had expressed interest to set up shop here under the agreement signed early this week by the BSP and Malaysia’s central bank.

The agreement between the BSP and Bank Negara Malaysia (BNM) will allow up to three QABs from each country to operate in the other under the Asean Banking Integration Framework (ABIF).

The BSP defined QABs as “strong and well-managed banks, headquartered in Asean and majority owned by Asean nationals.”

Espenilla said an agreement with another Asean country was being considered, but he declined to elaborate.

So far, no Philippine bank has expressed interest to establish operations in Malaysia as a QAB, the BSP official said.

ABIF, approved by Asean member-states in 2014, allows QABs to have greater access to neighboring markets as well as more flexibility in their operations there.

According to Asean’s website, “ABIF recognizes that some countries are more ready than others to further open up their banking sector… Hence, the current focus is on pursuing bilateral reciprocal arrangements” such as the agreement between the Philippine and Malaysian central banks.

BNM had also signed a bilateral deal with Thailand’s central bank.

Under the BSP-BNM agreement, QABs will enter the host jurisdiction only in the form of a subsidiary of the parent bank in the home jurisdiction.

For those entering the Philippines, “they will be regulated under applicable BSP regulations and within the legal framework defined under Republic Act (RA) No. 10641,” the BSP earlier said.

RA 10641 allows the full entry of foreign banks.

So far, the BSP has allowed six Asian banks to fully operate in the country.  Ben O. de Vera