APEC Business Advisory Council Expresses Support for Cebu Action Plan to Modernize Financial Markets

The Asia-Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC) expressed its support for the Cebu Action Plan (CAP), which is expected to be announced by APEC finance ministers during their annual meeting here from Sept. 10 to 11.

In ABAC’s report to the finance ministers, it endorsed the Cebu Action Plan, a multi-year roadmap for reforms for the Asia-Pacific region.

“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,” said Hiroyuki Suzuki, the 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.”

Finance industry experts joined officials from finance ministries and multilateral agencies in several workshops held this year to identify initiatives under the Cebu Action Plan.

Participants included representatives of leading banks, asset management firms, insurers, pension funds, credit bureaus, and rating agencies.

Other participants were finance industry associations involved in three ABAC-led initiatives. The Asia-Pacific Financial Forum (APFF), Asia-Pacific Infrastructure Partnership (APIP), and Financial Inclusion Forum are also actively participating.

During the meetings, officials identified concrete programs to expand small and medium enterprises’ (SMEs) access to funding, 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.

The ABAC hinted on the private sector’s intention to actively support initiatives under the Cebu Action Plan.

The private sector also supported the establishment of a network of experts from the financial industry, multilateral institutions and government to build credit information systems that will allow more SMEs to use their transaction records to obtain loans.

They will also help improve legal frameworks to enable SMEs’ wider use of movable assets as collateral.

The Asia-Pacific Financial Forum will convene workshops under the Cebu Action Plan 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 also committed to share their knowledge with policy-makers, SMEs, lenders and investors.

Another initiative envisioned under the CAP is the conduct of public-private dialogues to help the government design infrastructure projects attractive to private lenders and investors.

These dialogues will help identify regulatory barriers that hinder pension funds and insurance firms from investing in infrastructure.

To further develop the capital market, the private sector expressed its support for government efforts, underscoring its importance to infrastructure financing as well as in increasing the diversity and stability of the financial system.

The Asia-Pacific Financial Forum 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 also vowed to push for initiatives that would allow investors to effectively use risk management instruments, such as repurchase agreements and derivatives that would help them create deeper and more liquid securities markets.

According to the ABAC, the government should utilize the APFF as a platform to support the successful launch of the Asia Region Funds Passport, an initiative aimed at facilitating the cross-border flow of funds and regional financial integration. (PNA) SCS/PND/SSC