The Bangko Sentral ng Pilipinas (BSP) and Indonesia's Otoritas Jasa Keuangan (OJK) or Financial Services Authority signed the Letter of Intent (LOI) to formally start negotiations under the ASEAN Banking Integration Framework (ABIF) in a ceremony held yesterday in Jakarta.
The signatories to the document are BSP Governor Amando M. Tetangco, Jr. and OJK Chairman Muliaman D. Hadad.
Governor Tetangco noted that the LOI signifies our intention to further explore areas of cooperation between our banking systems, especially on the entry of Qualified ASEAN banks. The Governor added that beyond the LoI document itself, the BSP looks forward to the exchange of views with OJK on supervisory and regulatory framework and related issues.
ABIF enables banking integration by laying down the broad parameters for the establishment of Qualified ASEAN Banks (QABs). ABIF provides that QABs must meet global banking standards as well as the guidelines for their operations set under bilateral agreements between home and host countries.
During rites held on April 6 this year in Mactan, Cebu, the BSP signed the Declaration of Conclusion of Negotiations on the entry of QABs with Bank Negara Malaysia as well as the LoI to begin ABIF discussions with the Bank of Thailand.
Under ABIF's timetable, each ASEAN-5 country is to sign at least one bilateral agreement with another ASEAN-5 country by 2018. ASEAN-5 refers to Indonesia, Malaysia, Philippines, Singapore and Thailand. By 2020, ABIF targets the conclusion or near conclusion of at least one bilateral accord for each of the ten ASEAN members.
Source: Bangko Sentral ng Pilipinas (BSP)