Apec leaders set to dissect PH draft financial road map for region

The 21 economies belonging to the Asia-Pacific Economic Cooperation (Apec) will be enjoined to implement policy reforms aimed at integrating the region’s financial sector while enhancing resiliency, fiscal transparency and infrastructure development under a proposed 10-year road map shepherded by the Philippines.

The four-pillared Cebu Action Plan, the drafting of which is being spearheaded by this year’s host-economy, will be up for approval by Apec finance ministers when they meet in Cebu on Sept. 10 to 11.

The Cebu Action Plan “seeks to harmonize or coordinate the policies, rules and practices across Apec economies to support strong, sustainable, inclusive and balanced growth throughout the region,” the latest draft read.

Specifically, the 10-year road map aims to enable the following: free trade, especially in financial services, and the free flow of cross-border investments; good governance and sound fiscal policies; rapidly growing financial markets that offer diversified financial instruments, financial inclusion for all households and businesses; and financial resilience to risks arising from climate change and other natural disasters; and development of quality infrastructure.

According to the draft road map, “the time period of the Cebu Action Plan and its initiatives and deliverables is envisioned to last through 2025.”

“The current year’s host will be responsible for the short-term initiatives and deliverables (one-year) of the plan, and future hosts will have the opportunity to shape the Cebu Action Plan as they see fit,” it said.

Since Apec is non-binding, member-economies are nonetheless “free to determine their respective undertakings in relation to the Cebu Action Plan’s initiatives and deliverables, within the bounds of their domestic policies and regulations.”

Under the “promoting financial integration” pillar, Apec members will be enjoined to develop comprehensive credit information systems alongside the establishment of a regional credit information network dubbed Apec Financial Infrastructure Development Network within the Asia-Pacific Financial Forum.

Apec economies should also put in place legal and institutional infrastructure that will “facilitate the wider use of movable assets as collateral in the credit markets in order to expand SMEs’ [small and medium enterprises] access to finance, including trade and supply chain finance.”

Apec member-economies would also be encouraged to undertake actions toward financial services liberalization.

Under the “advancing fiscal transparency and policy reform” pillar, the road map will enjoin Apec members to “share knowledge and best practices in public investment frameworks and agree to rationalize and phase out inefficient fossil fuel subsidies that encourage wasteful consumption…”

Under the “enhancing financial resiliency” pillar, “Apec economies are encouraged to coordinate among macroeconomic policy officials to address global and regional  economic shocks, including imbalances, spillovers and strengthening safety nets” and also “exchange country experiences on macro-prudential measures.”