ABAC Endorses Cebu Action Plan to Modernize APEC's Financial Markets

“Finance ministers and private sector leaders should collaborate more closely to expand funding for micro- and small enterprises and infrastructure, increase resilience of enterprises and communities, and accelerate capital market development.” This is the main message in this year’s report of the APEC Business Advisory Council (ABAC) to Finance Ministers, according to Hiroyuki Suzuki, chair of ABAC’s Finance and Economics Working Group.

“These are the critical steps that APEC must take to catalyze the inclusive and broad-based growth that will transform our region into a strong and resilient engine of the global economy.”

ABAC’s report endorsed the Cebu Action Plan (CAP), a multi-year roadmap for reforms that Finance Ministers will announce at their annual meeting this coming September 10-11 in Cebu, Philippines.

Finance industry experts joined officials from finance ministries and multilateral agencies in several workshops held this year to identify initiatives under the CAP. They included representatives from leading banks, asset management firms, insurers, pension funds, credit bureaus and rating agencies, as well as financial industry associations involved in three ABAC-led initiatives - the Asia-Pacific Financial  Forum  (APFF),  Asia-Pacific  Infrastructure  Partnership  (APIP)  and  Financial  Inclusion Forum.

Following these discussions, officials have identified concrete programs to expand SMEs’ access to finance, promote financial inclusion and improve the depth and liquidity of capital markets. They also agreed to launch initiatives to develop the pension and insurance industries, increase private sector investment in infrastructure and facilitate disaster risk financing.

ABAC signaled the private sector’s intention of actively collaborating with these initiatives under the CAP.

The private sector is supporting the establishment of a network of experts from the financial industry, multilateral institutions and government to build credit information systems allowing more owners of small businesses to use their transaction records in obtaining loans. They will also help improve legal frameworks to enable SMEs’ wider use of movable assets as collateral.

The APFF will convene workshops under the CAP to promote policies and regulations that can facilitate trade and supply chain finance, as well as alternative financing mechanisms to spur investment in innovative start-ups. Experts from leading global banks, industry associations and multilateral institutions have committed to share their knowledge with policy makers, SMEs, lenders and investors.

Another initiative envisioned under the CAP is the holding of public-private dialogues to help officials design infrastructure projects that can attract private lenders and investors. These dialogues will also help identify regulatory disincentives that hinder pension funds and insurance firms from investing more widely in infrastructure.

The private sector will support governments’ efforts to develop capital markets, which are important for funding infrastructure and for increasing the diversity and stability of the financial system. APFF has developed self-assessment templates to assist governments in providing the information that investors need to increase their investments in the region’s capital markets.

The private sector will collaborate to identify reforms allowing investors to more effectively use risk management instruments such as repurchase agreements and derivatives that will help create deeper and more liquid securities markets. ABAC also called on governments to utilize APFF as a platform to support the successful launch of the Asia Region Funds Passport (ARFP), an initiative aimed at facilitating the cross-border flow of funds and regional financial integration.

Noting that the Asia-Pacific is the world’s most disaster-prone region, ABAC praised the CAP for including initiatives in microinsurance and disaster risk financing to help local communities and enterprises become more resilient. ABAC proposed that the CAP explicitly include concrete mechanisms for public-private collaboration in broadening access to microinsurance and developing effective financial instruments to support disaster risk financing.

“Financial industry CEOs and experts from across the region will be joining Finance Ministers at their meeting in Cebu to discuss their collaboration in promoting these initiatives under the CAP. For this reason, this year’s APEC Finance Ministers’ Meeting will be an important milestone in the evolution of Asia-Pacific financial markets,” Suzuki concluded.

The full text of the 2015 ABAC Report to APEC Finance Ministers and its annexes can be downloaded from: https://www.abaconline.org/v4/download.php?ContentID=22612587.

ABAC was created by APEC Leaders in 1995 to be the primary voice of business in APEC. Each economy has three members who are appointed by their respective Leaders. They meet four times a year in preparation for the presentation of their recommendations to the Leaders in a dialogue that is a key event in the annual Leaders Meeting.

ABAC 2015 is chaired by Ms. Doris Ho. Her co-chairs are Mr. Juan Francisco Raffo and Mr. Ning Gaoning. ABAC’s five working group chairs are: Mr. Hiroyuki Suzuki, Finance & Economics Working Group (FEWG); Sir Rod Eddington, Regional Economic Integration Working Group (REIWG); Dato Rohana Tan Sri Mahmood, SMME & Entrepreneurship Working Group (SMMEEWG); Mr. Bart Peterson, Sustainable Development Working Group; and Mr. Anthony Nightingale, Connectivity Working Group (CWG).

In 2010, Finance Ministers adopted ABAC’s proposal to convene an annual Financial Inclusion Forum to promote access to finance for unbanked households and micro-enterprises. In 2011, Finance Ministers established the Asia-Pacific Infrastructure Partnership (APIP) to be managed by ABAC. Its task is to initiate high-level dialogues between government, the private sector and multilateral institutions to advise APEC economies on policies and measures to ensure the success of infrastructure PPP projects.

In 2012, ABAC proposed the establishment of the Asia-Pacific Financial Forum (APFF), a platform for regional public-private collaboration to help accelerate the development of integrated financial markets and services in the region. In 2013, the APEC Finance Ministers adopted the APFF as one of their official policy initiatives and entrusted its management to ABAC.

For further information please contact:

• Ms.Catherine ABAC Executive Director, Tel: (63-2) 729-8888 local 8931 Email: [email protected]
• Mr. Antonio Basilio, Director, ABAC Secretariat, Tel: (63 2) 845 4564, Email: [email protected]
• Dr. Julius Caesar Parreñas, Coordinator, Asia-Pacific Financial Forum and Asia-Pacific Infrastructure Partnership, Tel: (81-3) 5255-9611 Email: [email protected]