THE Bangko Sentral ng Pilipinas (BSP) will be working on a possible bilateral agreement with the Singapore central bank that would allow qualified banks to operate subsidiaries in each other’s markets.
“We have not started yet with Singapore but it might happen soon… Maybe over the next few months… We have to touch base with the MAS,” central bank Governor Amando Tetangco Jr. said, referring to the Monetary Authority of Singapore.
The BSP governor was responding to questions for updates on the Asean Banking Integration Framework (ABIF), involving Qualified Asean Banks (QAB).
“We have one with Malaysia, Thailand, and Indonesia,” Tetangco said.
Earlier this year, the Bangko Sentral signed a letter of intent with Indonesia’s Otoritas Jasa Keuangan (OJK) and the Bank of Thailand to begin bilateral discussions in line with the ABIF.
The framework enjoins Asean-5 countries to hammer out at least one bilateral agreement with another Asean-5 counterpart by 2018. Asean-5 counts Indonesia, Malaysia, Philippines, Singapore and Thailand as members. The framework also targets the conclusion or near conclusion of at least one bilateral agreement for each of the 10 Asean members by 2020.
In April, the BSP and the Bank Negara Malaysia signed a Declaration of Conclusion of Negotiations on qualified banks.
Qualified banks are well-managed banks majority owned by nationals of the Association of Southeast Asian Nations or Asean. Banks that qualify for QAB status must be endorsed by the home country regulator and may be accepted by a host country regulator based on bilateral agreements.
Meanwhile, the negotiation lays down the rules for the qualified banks between jurisdictions. From then on, an ABIF-related agreement between jurisdictions will eventually be reflected in the respective Schedule of Commitment of each country.
The commitment reflects the final offers that each country makes to a specific counterpart and offers that are made available to all member-states.
Established 50 years ago, Asean groups Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam into a single trade bloc.