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| Felipe Medalla, the governor of Bangko Sentral ng Pilipinas (BSP) ― the Philippines' central bank ― speaks during an exclusive interview with The Korea Times, Wednesday, on the occasion of the 56th annual meeting of the Asian Development Bank (ADB) at Songdo Convensia in Incheon. Korea Times photo by Choi Won-suk |
Medalla suggests bolstering Korea-Philippines trade for regional financial inclusion
By Yi Whan-woo
INCHEON ― The member countries of the Asian Development Bank (ADB) should continue to enhance multilateral financial cooperation to ensure sufficient liquidity and foreign exchange reserves against possible economic crisis, the top central banker of the Philippines said.
In an exclusive interview with The Korea Times, Felipe Medalla, the governor of Bangko Sentral ng Pilipinas (BSP) ― the Philippines' central bank ― also said expanding Korea's trade with the Philippines will be helpful on the region's path to financial inclusion.
"The nature of financial cooperation, especially when it comes to do with liquidity and reserves, is pooling resources. So, clearly, cooperation is more effective in times of crisis if it is on a multilateral level," Medalla said Wednesday as he was attending the 56th annual meeting of the ADB.
The meeting is taking place at Songdo Convensia in Inchon's Songdo International Business District on a four-day run through Friday.
Medalla made his remark in line with the ASEAN+3 Finance Ministers and Central Bank Governors' Meeting that took place, Tuesday, on the occasion of the ADB gathering.
In their joint statement, top fiscal and monetary policymakers of the 10 ASEAN countries plus Korea, China and Japan agreed to strengthen regional financial cooperation against pandemic-induced global economic uncertainties.
They addressed the need to discuss creation of a rapid financing facility, "which will allow the members to access financing to meet urgent balance of payment needs arising from sudden exogenous shocks, such as pandemics and natural disasters."
In this regard, Medalla underlined the importance of "seeing our problem from the Asian eyes," saying, "It will be very helpful if we pool some of our foreign exchange to the country that's having temporary problems."
Concerning financial inclusion, a term referring to universal access to financial products and services for all individuals and businesses, he said using financial technology will be crucial for "more targeted assistance to the poor, the vulnerable."
He especially urged a focus on tackling climate change, saying it will hurt the poor the most.
Asked about Korea's part to play for financial inclusion in the region, Medalla suggested bolstering trade although it may sound too conventional.
"I think I belong to the old school that trade is better than loans … and that the best way that countries like Korea can help the poor countries is to allow the poorer countries to sell products," he said.
The cooperative relation through trade can be applicable for the Korea-Philippines ties, Medalla noted, saying, "The Philippines-Korea free trade agreement, which we are still discussing, is extremely important to us."
The two countries are in the final stage of negotiation for the bilateral trade pact to take effect, possibly this summer, after reaching an agreement for the pact in 2021.
Medalla assessed Korea is doing well as the host of this year's ADB meeting in sharing its unique experience as an aid recipient-turned-donor country for the ADB partner countries to take into account in the post-pandemic era.
The Philippines' top central banker, nevertheless, stressed that developing countries must stand on their own feet in the end.
"The best advice we got from Korea is you've got to do it yourself in the end," he said, adding, "Remember, very few countries are able to escape (being) poor to become rich in one or one and a half generations. That's very rare and we all look up to Korea."
Regarding the Philippines' advantage as the home of the ADB headquarters, he said its nationals get a better chance to get hired at international financial institutions and see the economy from an Asian perspective through interactions with the officials from ADB partner countries.
Formerly a professor at the University of the Philippines School of Economics, Medalla has been serving his term as governor of the central bank since last year.
He last visited Korea in 2022 for an international financial meeting. He said, regarding all aspects of the ADB gathering in Incheon, it's "closer and faster."
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