By Philippine News Agency
Indonesia’s Financial Services Authority (OJK) plans to expand banking access to the Philippines by signing a Letter of Intent with its central bank, the Bangko Sentral ng Pilipinas (BSP).
The cooperation will pave the way for access to some Indonesian banks that are already certified as “Qualified ASEAN Bank” (QAB), the authority’s deputy commissioner for supervision, I Sukarela Batunanggar, said during a press conference in Jakarta on Friday.
“Besides the positive trends in economic growth, the two countries also have similarities in the sectors of social and economy, mainly in their domestic credit ratios.”
Indonesia and the Philippines, he further said, also have great potential in terms of the size of their populations.
“The two countries still have more opportunities to continue flourishing,” he noted.
The letter of intent that is scheduled to be signed next Sunday is an initial measure for negotiating bilateral cooperation through the ASEAN Banking Integration Framework (ABIF).
The framework, which is based on the principles of reciprocity and equality, aims to support the banks in expanding their business within the Southeast Asian region.
In accordance with the framework, Batunanggar stated the authority has assessed several banks that seek to hold a QAB certification.
Batunanggar expressed hope that the negotiation between the two countries would be completed soon, so it would enhance trade between Indonesia and the Philippines.
In 2016, the two countries’ trade volumes remained low, compared with other states.
Indonesian exports to the Philippines reached less than 4 percent last year, while imports were only about 1 percent.
The authority had signed a similar letter of intent for bilateral financial cooperation with the Bank of Thailand (BOT) in March last year.
Another bilateral deal was implemented between the Indonesian financial authority and the Malaysian central bank in August last year.