The integration of the economies in the Association of Southeast Asian Nations (Asean) by 2015 may go beyond its deadline, particularly in the readiness of the banking industry, according to a bank executive.
On the sidelines of the University of Santo Tomas business leadership CEO Series (UST CEO Series), the Union Bank of the Philippines president and chief executive officer, Victor Valdepeñas, said that it may take a long time for the Asean countries to be fully ready for the upcoming integration of the region in 2015.
“As timetable is concerned, I guess each country must have to decide when they are ready and it might extend way up to 2020,” he said.
The Asean economic integration by 2015 aim to establish the Asean Economic Community (AEC), which is characterized for having a single market and production base, a highly competitive economic region, a region of equitable economic development and a region fully integrated into the global economy.
It involves human resources development and capacity building; recognition of professional qualifications; closer consultation on macroeconomic and financial policies; trade financing measures; enhanced infrastructure and communications connectivity; development of electronic transactions through e-Asean; integrating industries across the region to promote regional sourcing and enhancing private sector involvement for the building of the AEC.
The AEC will also transform Asean into a region with free movement of goods, services, investment, skilled labor and freer flow of capital.
For the banking industry, Valdepeñas said that there is still so much to go through in terms of readying a domestic bank to enter another market or country.
“Asean itself has given the criteria with respect to what they term as the ‘Asean qualified banks,’ which they have to work out,” he explained.
One of the blueprint of AEC is to establish a set of criteria for Asean-qualified banks to operate in any country in the region with a single “passport.” By 2015, an Asean qualified bank can freely expand to other countries in the region.
The bank executive also noted one thing to be considered in the upcoming integration is the unevenness in the size of banks as some countries have very big banks, while some countries have smaller banks.
“Therefore it takes sometime before they could come up with a uniformed criteria or rules that will qualify the domestic banks/home country banks to be present in all Asean countries. They don’t have that rules yet,” he said.
Valdepeñas has been the president, CEO and director of UnionBank of the Philippines since January 1, 1998.
He spoke before the UST CEO Series business forum on Wednesday night. The series is being conducted by the UST Graduate School, and is facilitated by Professor Tommy Tiu.
Launched by Lilian Sison, the UST CEO Series aims to address the need of closing the gap between the academe and business sector.