“THE PHILIPPINES is an attractive market without a means to compete,” according to BDO Unibank Inc. president Nestor Tan, expressing worry that Philippine banks are not ready to compete with the bigger banks of neighboring countries with the establishment of the Asean Economic Community (AEC).
The AEC, which seeks to create a single market and production base in Southeast Asia, is targeted for completion by Dec. 31. The plan includes an integrated financial and banking industry but uneven development may stall this process.
Tan, in an economic briefing in Makati City attended by businessmen, economists and diplomats Thursday night, said that for the Philippines, the Asean integration was “now or never” as the markets would eventually open and countries would compete with each other.
Arjun Goswami, director for the office of regional economic integration of Asian Development Bank; Walter van Hattum, head of the economic and trade section of the European Union delegation in the Philippines, and Ceferino Rodolfo, assistant secretary of the Department Trade and Industry, also spoke at the briefing held in Makati City.
Tan conceded that Asean integration would make competition more orderly and establish rules by which everyone will play.
“Asean banking is the harmonization of the rules and regulations governing banks in the Asean region and creation of a common system for payments, settlements,” he said.
But Tan predicted that Asean integration could have a downside for the region, particularly to the banking industry.
“For banks, we expect heavier requirements, the byproduct of global standards,” he said.
Tan said that while the Philippines lacked the readiness to compete with its neighbors, Asean integration “will not happen overnight.”
“We need to do something now. We need to work together to try and help the institutions within the Philippines,” he said.