MANILA, Philippines - Asian economies including the Philippines are working on attracting more investments to address their infrastructure needs, the Financial Stability Board’s regional consultative group for Asia said.
Masamichi Kono, co-chairman of the FSB’s RCG for Asia, said the recent meeting of the group in Bohol last week threshed out the different sweeteners governments dangle to investors in order to rake in long-term investments needed for growth.
“Our discussion was relatively preliminary in the sense that we have a group of volunteers from the regional group to conduct a survey on what initiatives, incentives, they were providing within their jurisdictions with the angle of long-term investments,” Kono, also the vice minister for international affairs at the Japan Financial Services Agency, said.
McKinsey & Company in 2011 projected Asia will need around $8 trillion for infrastructure projects to cover the demand and remedy previous underinvestment. The firm said that about $1 trillion worth of these projects will be opened to investors under various public-private partnership programs.
“How to address this issue of promoting long-term investment and also infrastructure investment for growth is very much the subject of global interest particularly in Asia,” Kono said.
Kono said the regional consultative group is looking at how to better strengthen bank lending and provide long-term financing to firms including small and medium enterprises and start-ups.
“Given the Asian financial system is very much bank-centered particularly within the region, bank lending is predominant in providing the long-term funds,” he said.
The group has also tackled the role of development banks and multilateral institutions such as the Asian Development Bank in financing infrastructure in the region.
“We are still at the stage of putting all those measures taken by countries into context and we will continue our discussions on maybe what are the suggestions or what best practices we can identify,” Kono said.
In Southeast Asia, Singapore cornered the lion’s share of FDIs in 2013 with a net inflow of $60.6 billion, data from the Association of Southeast Asian Nations showed.