BSP: Phl leads in region on schemes for co-ops

Riza Recio

Asia-Pacific Economic Cooperation (APEC) member countries can emulate the Philippines initiative on credit surety fund that allows cooperatives to borrow 10 times of their minimum P100,000 contribution, Bangko Sentral Ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo said last Friday during the culminating event of the APEC Finance and Central Bank Deputies’ Meeting after the two-day discussion held in Tagaytay City.

Under this set up, there is an oversight committee composed of cooperatives themselves, the Land Bank of the Philippines, the Development Bank of the Philippines (DBP), the Industrial Guarantee Loan Fund, and the local government units, he said, adding that more than P1 billion has been granted under this framework.

This macro prudential measure serves as a means of ensuring financial stability in case of sector-specific shocks, particularly in asset markets, such as real estate properties, and at the same time on the conduct of monetary policy, he said.

On Thursday, APEC Business Advisory Council (ABAC) member Dr. Caesar Parrenas discussed on the creation of a credit information system, the use of movable collaterals, and fixing trade and supply chain financing.  The ABAC is collating experiences from countries that have successfully initiated legal reforms that allow the use of movables as collaterals because one of the problems of small and medium enterprises (SMEs) in the Asia-Pacific region, especially the medium enterprises, is that many of them do not have real state collaterals.

Another important thing for small businesses is an e-commerce platform, Parrenas said, noting that the issue on e-commerce platform is how to develop the regulatory structure that would make it safe and function efficiently.

The APEC Finance and Central Bank Deputies’ Meeting opened last Thursday to address the concerns of businesses in the region, as well as spur economic growth.

Meanwhile,Marciano Paynor, Secretary General of the APEC Philippines 2015’s National Organizing Committee, said holding the forum’s initial meetings in different locations in the country aims to promote these places for tourism and investment. These meetings run up to the APEC Leaders’ Meeting in November.

During APEC meet last Thursday, Finance Undersecretary Gil S. Beltran said the 21 Pacific Rim economies grouped in the APEC were convinced of doing more structural reforms to address volatility and slowdown in investments noting that their economies were growing four to 5 percent before the global crisis but the International Monetary Fund (IMF) forecasting that the Asia-Pacific region to accelerate 4.3 percent this year from 3.9 percent in 2014.

The region is concerned that its economy is not growing as fast before the global crisis.  The setting up of credit information bureaus in all APEC member economies is being proposed for financial inclusion of small and medium enterprises situated even in faraway provinces and resulting to helping create employment and economic activity in the communities.

Beltran also said that the APEC member economies’ savings can revive regional growth by funding infrastructure and financial inclusion.  With the “contradicting monetary stances” by Europe, Japan and the United States after the financial crisis, he said, these resulted to volatility in the financial market.

With Europe and Japan still in the low growth level, they are loosening up their monetary policies to revive growth, he added.  The US, in trying to normalize its monetary policy, is adjusting interest rates to higher levels.

The APEC economies are adjusting to these contradicting stances on monetary policies of world leaders in the financial markets, Beltran said.  The APEC members are doing this “so they could avoid or emerge from a more volatile financial situation.”

Beltran said the general consensus is that the best antidote to volatility would be structural reforms.

The APEC meet revealed that the Public-Private Partnership (PPP) Center will be endorsing the Php370-billion Mass Transit System Loop (MTSL), for approval by the National Economic and Development Authority (NEDA) Board, this according to APEC PPP Experts Advisory Council Executive Director Cosette Canilao.  Also for approval is the Php19.3-billion Motor Vehicle Inspection System (MVIS). The NEDA Board meeting on March 24 will have discussions on these projects, she said.

President Benigno S. Aquino III chairs the NEDA Board.

For the MTSL, the PPP Center prefers the route using 26th Street instead of the 32nd Street inside the Bonifacio Global City (BGC) on cost consideration.  This subway will connect Bonifacio Global City, Makati Central Business District and the Mall of Asia area in Pasay City.  The MVIS will test various categories of heavy duty, light duty and two wheeler vehicles across the Philippines.  The private partner will develop, operate and maintain a network of MVICs that will perform inspections for all vehicles in the country.

Guillermo Luz, APEC Business Advisory Council alternate member underscored that the PPP projects should have predictability for investors to consider these viable, noting also that they should be “purposely planned” to attract more private sector investments.

The Philippine government achieved a milestone last year in the implementation of PPP program with 61 PPP projects in the pipeline worth $26 billion of which nine projects were awarded totaling about $2.9 billion.