ASEAN wary of going global in finance

ASEAN wary of going global in finance

MANILA (AFP): ASEAN member countries are reluctant to support a proposed agreement in the World Trade Organization (WTO) to liberalize trade in financial services by the end of this year, Philippine Trade Secretary Cesar Bautista said over the weekend.

"The financial services sector is the area which ASEAN countries are wary of opening up to the rest of the world," Bautista said.

Financial institutions in the region expressed worry that they would be unable to compete with their western counterparts if the sector is opened, he said, adding that the institutions in the region needed to build up their capitalization.

Bautista returned from last week's meeting of Association of South East Asian Nations (ASEAN) economic ministers in Jakarta, where the issue was discussed.

The ministers have yet to discuss ways to implement a regional liberalization thrust for the financial services sector.

The WTO has set July 14 as the target date for receiving liberalization offers from member countries and the end of the year for concluding the negotiations, WTO director-general Renato Ruggiero said during a regional conference here in May.

"The participation of countries of East Asia and Southeast Asia is important because of (their) relevance, because of the advantages that the multilateral system has brought to this region, and the importance of the financial institutions in this part of the world," Ruggiero said.

Bautista said Manila's minimum offer to the proposed WTO agreement is an amendment to the 1994 General Banking Act which allowed the entry of 10 foreign banks to open full branches in the Philippines.

The amendment will allow foreign banks, which failed to get one of the 10 slots, to open majority-owned subsidiaries or gain controlling stakes in existing local banks, he said.

ASEAN groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.