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The Financial Services Authority (OJK) plans to expand banking access to the Philippines by signing a Letter of Intent (LoI) with the countrys central bank, Bangko Sentral ng Pilipinas (BSP).
The cooperation will pave way for access to some Indonesian banks that already certified as “Qualified ASEAN Bank” (QAB), the authoritys Deputy Commissioner for Supervision, I Sukarela Batunanggar, said at a press conference in Jakarta on Friday.
“Besides the positive trends in economy growth, the two countries also have similarities in the sectors of social and economy, mainly in their domestic credit ratios,” Batunanggar stated.
Indonesia and the Philippines, he further remarked, also have great potential in terms of their population sizes.
“The two countries still have more opportunities to continue flourishing,” he noted.
The LoI that was scheduled to be signed on next Sunday is an initial measure for negotiating bilateral cooperation through the ASEAN Banking Integration Framework (ABIF).
The framework, which is set by two main principles, including reciprocity and equality, is aimed at supporting the banks in expanding their business within the Southeast Asia region.
In accordance with the framework, Batunanggar stated the authority has assessed several banks that seek to hold a QAB certification.
Batunanggar hoped the negotiation between two countries could be completed soon, so it would enhance trade volumes 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 the imports were only about 1 percent.
The authority had signed a similar LoI for bilateral financial cooperation with Bank of Thailand (BOT) in March last year.
Another bilateral deal was implemented between the countrys financial authority and the Malaysian bank central in August last year.
