Finance execs fine-tune roadmap to make APEC resilient to shocks

A roadmap aimed at making the Asia-Pacific region more resilient to financial shocks and natural

disasters is expected to gain the commitment from finance ministers tomorrow.
The Cebu Action Plan, a 19-page document proposed by the Philippines, is being fine-tuned by 212 senior

finance officials currently meeting in Mactan.
It is set to be launched at the conclusion of the Asia-Pacific Economic Cooperation (APEC) Finance

Ministers’ Meeting tomorrow.
The plan has four pillars: promoting financial integration; advancing fiscal transparency and policy

reform; enhancing financial resiliency; and accelerating infrastructure development and financing.
Finance Undersecretary Gil S. Beltran said a list of deliverables under each pillar has been drawn up,

including the implementation of a scheme that will allow some economies to tap excess savings such as

mutual funds and pension funds for infrastructure and other productive investments.
“They (deliverables) are being negotiated on and debated on as of today (Wednesday),” he said in a

press briefing yesterday.
With APEC cooperation being voluntary in nature, not all economies are expected to commit to such an

“ambitious proposal,” Fabier Roca Fabianis, Peru director-general for international economic affairs,

said in the same briefing.
SUPPORT
But as of Wednesday afternoon, Beltran said there was “broad support for all pillars.”
“It’s just the wording— how to formulate them in such a way that all the sensitivities of certain

measures will be acceptable by everyone,” Beltran said.
“All of these pillars are necessary to retain the dynamism of all the economies in the region and make

them more resilient to economic shocks and natural disasters,” he added.
Roca said Peru, which will host the APEC meetings next year, is fully committed to implement the plan.
Together with the Philippines and Vietnam, he said they were coming up with a strategy to implement the

plan in the short term.
Roca noted how financial crises have become the new normal, posing big challenges to each APEC economy.
Based on the lessons from past financial crises, Beltran said they hoped to avoid another crisis with

the implementation of the Cebu Action Plan.
The targets of the Cebu Action Plan are grouped according to three timetables — in one year, five

years and 10 years.
FUNDS PASSPORT
Among the deliverables being eyed for next year is the proposed Asia Region Funds Passport (ARFP),

which will allow cross-border marketing of mutual funds and other investment products. This would

hasten the flow of capital and investments across economies and support the third pillar on enhancing

resilience.
“APEC accounts for one of the biggest investable funds in the world. There are many mutual funds in the

region that can move to where they’re needed,” Beltran said. Mutual funds are excess savings pooled

from several investors and are usually invested in securities such as stocks and bonds.
“By getting the policies coordinated with each other, we will hasten the flow (of funds) from the

economies with excess savings to the ones with lower savings so that all economies will grow together,”

Beltran added.
A mutual fund in one economy would need only to present a permit to be able to market its products in

another APEC economy.
As of yesterday, Beltran said it was “difficult to say” which of the 21 APEC economies aside from the

Philippines and Peru will commit to participate in the ARFP. This will be known tomorrow, he added.
Roca, for his part, said the number of economies that will participate in the pilot implementation of

the ARFP next year doesn’t matter.
“If we start with 10, it’s good. We need to lead by example and show the benefits of this instrument,”

he said.
REQUIREMENT
Before the Philippines can take part in the ARFP, however, it will have to be a signatory to the

International Organization of Securities Commissions’ Appendix A of the Multilateral Memorandum of

Understanding.
This memorandum, established in 2002, provides the “tools for combating cross-border fraud and

misconduct that can weaken global markets and undermine investor confidence.”
Under this memorandum, the signatories agree to “consult, cooperate, and exchange information for the

purpose of regulatory enforcement regarding securities markets.”
Securities and Exchange Commission (SEC) officials earlier said the Philippines has applied to become a

signatory and was awaiting evaluation within this month. /With Reporter Aileen Garcia-Yap