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Atty. Mel Georgie Racela

The document discusses banking integration in ASEAN and the opportunities and challenges it presents. It notes that under the ASEAN Qualified Bank framework, banks are assessed by their home country regulator according to prudential requirements and through bilateral agreements between home and host nations. Banking integration could expand customer bases, reduce costs through competition, and more efficiently allocate funds. However, challenges include developing strong governance and risk cultures, building core competencies to compete across borders, investing in information and communication technology, protecting consumers, and establishing communication plans between stakeholders. The Philippines banking industry is assessed as largely ready for integration, having liberalized entry requirements, strengthened domestic presence, harmonized products, invested in IT, explored partnerships, and having significant room for

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30 views2 pages

Atty. Mel Georgie Racela

The document discusses banking integration in ASEAN and the opportunities and challenges it presents. It notes that under the ASEAN Qualified Bank framework, banks are assessed by their home country regulator according to prudential requirements and through bilateral agreements between home and host nations. Banking integration could expand customer bases, reduce costs through competition, and more efficiently allocate funds. However, challenges include developing strong governance and risk cultures, building core competencies to compete across borders, investing in information and communication technology, protecting consumers, and establishing communication plans between stakeholders. The Philippines banking industry is assessed as largely ready for integration, having liberalized entry requirements, strengthened domestic presence, harmonized products, invested in IT, explored partnerships, and having significant room for

Uploaded by

keith105
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Atty.

Mel Georgie Racela


A. ASEAN Banking Federation
Qualified ASEAN Bank: (QAB)
- assessed by home country
- Bilateral arrangement bet home and host country
- assessed by host (by its prudential requirements) not automatic
- finalization
Note: Uniquely ASEAN (not like EU)
B.
-

Banking market integration


Expand customer base
Reduce costs due to competition, etc.
Ease of allocating funds
Mobilization of more savings
Note the 7 new banks who seek to operate here
Enhance information linkages

C. Challenges of banking integration:


Governance and risk culture
Developing core competencies
-there is a greater need to develop this because banks have to be at par with their peers,
now offered cross border, need to appreciate their new market. (e.g. BDO, now
concentrated in retail banking, with new entrants, such as a bank that specializes in
SMEs, it is in the interest of BDO to improve to be competitive)
Info and Communication Technology
-for an archipelago, socio-economic is greatly diverse, its a capital intensive undertaking.
ICT should be used to improve delivery of services (i.e. e-money)
Consumer Protection
-on the part of CBs.
Communication Plan
-both for banks and BSP, there should be a plan to facilitate communication between
stakeholders.
-To communicate effectively.
IS THE PH BANKING INDUSTRY READY? (see slide 3)
Yes. There is liberalization in entry (RA 10641) (e.g. Sumitomo Bank, and others)
These are the measures taken:
1. Strengthening domestic presence;
2. Harmonization of products;

3. Investment in IT;
4. Exploration of tie-ups;
There is huge room for improvement for foreign banks because they only comprise of 10%.
Slide 4: PH Banking system at a glance.
See RA 10574 (improving competition)
PH entering demographic sweet spot = correlated with improved economy.
Median working age of 23 y/o.
Ratio of 14:10000 in the PH. (banks to population) There is potential.
Would the integration make AML Act easier to implement or rather make it more difficult? Also,
how would JD be determined? Is there anything done address this issue?
(d tlga nasagot haha!)
Dictated by domestic regulations.
Compared to ASEAN we are more advanced.
At par SG or a little bit higher. But with others, so when they operate here they have to
abide by our laws. We can examine because we are equipped to ensure they comply with
AMLA.
We are in a better position.
Our AMLA laws are examined by WB, IMF, we are now off the black list. In fact, we are ahead
compared to our ASEAN neighbours.
But if our banks enter other countries, they are more equipped because they are presumed to
comply with out strict AMLA laws.

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