What Are the Positive and Negative Effects of Asean Integration in the Banking Industry of the Philippines?

What are the positive and negative effects of ASEAN integration in the banking industry of the Philippines?

Positive Effects:

In the past few years Philippines had made significant improvement with ASEAN integration it allows foreign banks the ease to establish or acquire banks in the Philippines.

An integrated banking market will promote stronger competition. ASEAN’s leading banks can compete directly in emerging markets, leading to improvements in quality of financial services in ASEAN.

There are differing views in Southeast Asia and more widely on what is the most appropriate ‘regional identity’ as a basis for long-term cooperation. One strand of thinking has focused on the desirability of pursuing a distinctly ‘East Asian’ concept of cooperation, which would encompass only states from that region. In Southeast Asia this approach has been identified with former Prime Minister Mahathir Mohamad of Malaysia, but there has been considerable interest in and support for this approach, including from China.

Fitch said that the Philippines stands to gain from the entry of new foreign players, as it opens up new sources of funding. “Entry by foreign banks is likely to support investment and economic growth in the near term by helping to fund much-needed infrastructure investment.”

Negative Effects:

The integration could also mean risk to one country for our local banks to compete with huge international banks in these ASEAN countries especially Philippines is so far behind when it comes to ASEAN-5 banking loan assets (2012-2016). One of the reason is that people who have bank accounts in Philippines is nowhere as close as these other ASEAN countries.