with the establishment of the asean economic community or aec in 2015, we are now at that phase of formally consolidating the 10 asean markets into a single economic base. to achieve this, it is necessary that we have an integrated and well - functioning regional financial system. this is defined under the asean financial integration framework or afif. within the afif is the integration of the banking markets. this is what we refer to as abif and it is being pursued alongside the integration of the other facets of the financial market such as the payments and settlement system, the capital market, and the insurance sector. a proper response to your chosen topic of what asean integration means to asian and philippine banking must therefore take a holistic view that considers abif in the context of afif, which in turn is an essential element of the aec, which itself is only 1 of the 3 “ communities ”. there are many moving parts in asean integration but it is clear that the envisioned upside is premised on economies of scale and scope. latest statistics from the asean secretariat tell us 1 / 4 bis central bankers'speeches that asean represents usd2. 4 trillion in combined gdp, making it among the 10 biggest economies in the world. over the past decade and a half, asean was the 3rd fastest growing economy in the world, behind only china and india. asean has a population base of 629 million, 35 % of whom are below 20 years old. total trade volumes reached a high of usd2. 53 trillion in 2014 and fdi inflows, usd120. 8 billion in 2015. 1 clearly, these are not small numbers ; but they are relevant only if we see asean as an integrated market. taking full advantage of this aggregate size and collective economic strength is precisely the point of integration so that there is freer movement of goods and services as well as of labor and capital. in asean ’ s vision, this will allow for the unbundling of distribution from production, so that one can produce in the jurisdictions which have the comparative advantage for the product and have the product sold in other jurisdictions where there is greatest demand. the freer movement of capital is not only for production, it also holds true for the regional financial market. when compared with other regional blocs or other countries in the world, asean is well - documented to have a higher saving rate relative to gdp. cross - border portfolio flows data confirm, however, that asean minimally invests into asean

amando m tetangco : philippine banking in an integrated regional financial market speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the annual reception for the closing plenary of the 29th national convention of the bankers institute of the philippines, tagaytay city, 11 march 2017. * * * good evening everyone! it is a great pleasure for me to join baiphil ’ s 29th national convention. baiphil is important to us. you are one of the key partners of the bsp in ensuring that the quality of bank personnel meets the rigorous requirements of our banking system. this is crucial — our banking sector has grown into a p13. 5 trillion industry in terms of assets and is responsible for deposits that have reached a record high of p10. 4 trillion as of december 2016. this is a great responsibility. given this, and as we consider the way forward, let me take this opportunity to share with you my thoughts about critical developments that will define our financial markets in the years to come. i will take this opportunity therefore to share my thoughts about critical developments that will define our financial markets in the years to come. ladies and gentlemen. 2017 is bound to bring on a new set of challenges to the global economy with brexit, policy changes in the us under its new president, the us fed ’ s decision to increase policy rates, and china ’ s decision to pursue stability by moderating economic growth. the imf sees some softening from asian emerging markets, but projects a modest growth overall in the world economy. what about the philippines? well, you will be pleased to know that quite a number of multilateral agencies and global institutions expect the philippines to outperform many of our economic peers. nevertheless, we should not be complacent. given the sea change unfolding in the global markets, we need to be strategic in our thinking and deliberate in our collective actions if we are to successfully navigate through emerging challenges. one area where we find challenges and opportunities for us, is the asean integration. if we revisit the underpinnings of asean market integration, we find that its vision is premised literally on the concept of building a community. and like all communities, the asean community is itself built around different components, specifically, developing a political - security community, a socio - cultural community and an economic community.