Finance ministers yesterday adopted a 10-year financial road map named after Cebu, placing the province in the history books of 21 Asia-Pacific economies.
The Cebu Action Plan is a voluntary, non-binding document that will guide members of the Asia-Pacific Economic Cooperation (APEC) forum in their efforts to create a “more prosperous, financially integrated, transparent, resilient and connected” community.
Philippine Finance Secretary Cesar V. Purisima said the plan continues the progress towards the Bogor Goals, considered the key to achieving APEC’s vision of free flow of goods, services and capital across the Asia-Pacific region. The Bogor Goals document is named after Bogor, Indonesia, where the APEC leaders met in 1994.
“The idea is to make the Cebu Action Plan a living document, one that grows as the members see fit,” Purisima said in a joint press conference at the end of the APEC Finance Ministers’ Meeting in Mactan yesterday.
“It is our hope that the Cebu Action Plan is going to be referred to again and again in a similar way to how the trade ministers continually refer to the Bogor Goals in order to gauge progress in their discussions,” Purisima added.
The plan will be submitted to APEC leaders during their summit in Manila in November.
Deputy Minister Enzo Defilippi of Peru, which will host the APEC meetings next year, said they will focus their efforts on implementing the Cebu Action Plan.
In a joint statement, the ministers also committed yesterday to resist all forms of protectionism and refrain from competitive currency devaluations amid the financial volatility in the region.
CHINA VOLATILITY
Chinese Vice Finance Minister Shi Yaobin, in the same press conference, said through an interpreter that China has “agreed not to adopt the practice of competitive devaluation.”
China’s devaluation of the yuan last month caused global stock market routs.
Shi said China’s economy is facing “some downward pressure” and its stock market is experiencing volatility, but stressed that these are temporary and were caused by technical factors.
“We are confident that China will maintain a stable and balanced economic growth and will make our due contribution to the world economy,” he added. China’s economy grew by 7 percent in the first half, lower than previous growth rates but still considered “very high.”
The ministerial statement noted that the continued growth of the region requires efficient, innovative and competitive financial markets.
The ministers promised to work to develop a more inclusive market across APEC as well as facilitate intra-regional trade and investment and greater regional integration.
Recognizing that the region faces frequent costly natural disasters, the finance ministers agreed to enhance their financial resilience “through the development of innovative disaster risk financing and insurance mechanisms and other risk transfer instruments” in the capital markets.
They said they have commissioned the Manila-based Asian Development Bank and the Organization for Economic Cooperation and Development (OECD) to prepare a report on managing the financial risks of disasters.
They also asked the World Bank to study and report on options for regional disaster risk financing mechanisms, including risk pooling among interested APEC nations.
The region is located along the Pacific “Ring of Fire,” where volcanic activity and earthquakes are common, and is hit by frequent typhoons. Super Typhoon Haiyan devastated the central
Philippines in 2013, leaving more than 7,300 dead or missing.
DELIVERABLES
Under the Cebu Action Plan, the 21 APEC economies listed projects and programs for the short term (one year), medium term (two to four years), and long term (five to 10 years) under its four pillars.
Among the targets for next year is the implementation of the Asia Region Funds Passport, a scheme that will allow cross-border marketing of mutual funds.
Six economies yesterday signed a Statement of Understanding for the pilot implementation of the scheme next year. These are Australia, Japan, South Korea, Philippines, Thailand and New Zealand.
The statement pushed for the signing of a Memorandum of Cooperation within this year to move the scheme forward.
Australian Finance Minister Mathias Cormann said he was confident that Singapore will also sign up for the scheme.
“We are hoping that many other countries across the Asia-Pacific region will join this very important initiative. It goes to the heart of one of the key pillars of the Cebu Action Plan, which is greater financial integration across our region,” he said in the same press conference.
The more economies that will participate in the scheme, the better for the competitiveness of the region’s financial service providers in the region vis-a-vis those in Europe, he added.
Other immediate projects include the establishment of a public-private partnership knowledge portal that will contain a database of PPP projects undertaken by APEC members.
Purisima said the Cebu Action Plan also aims to harmonize the terms and contract provisions of PPP projects.
The Cebu Action Plan envisions greater financial integration, more fiscal reforms, enhanced financial resilience and accelerated infrastructure development and financing. /With AP