The Philippines is eyeing bilateral deals with Indonesia and Thailand for the establishment of qualified Asean banks (QABs), Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said.
In a recent speech, Tetangco said the central bank would initiate formal discussions with the Bank of Thailand and Indonesia’s Otoritas Jasa Keuangan with the end goal of signing agreements under the Asean Banking Integration Framework (Abif).
Last week, top BSP officials met with their counterparts from the Bank of Thailand in the Thai city of Chiang Mai for bilateral discussions.
In March, the BSP and Bank Negara Malaysia (BNM) also agreed to allow three QABs from each country to operate under the Abif.
The BSP defined QABs as “strong and well-managed banks, headquartered in Asean and majority owned by Asean nationals.”
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 the Asean 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.”
Under the agreement between BSP and BNM, QABs will enter the host jurisdiction only as subsidiaries of the parent bank.
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 already allowed nine Asian banks to fully operate in the country, including Japan’s Sumitomo Mitsui Banking Corp. —BEN O. DE VERA