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ASEAN+3 weighs a standing rapid financing facility after 17 CMIM test runs
The Bangko Sentral ng Pilipinas and Japan's Ministry of Finance co-led technical talks in Puerto Princesa on making the CMIM rapid financing facility permanent and on settling more regional trade in local currencies.
The Investor · Invest desk
What happened
- The Bangko Sentral ng Pilipinas, the Philippine Department of Finance, Japan's Ministry of Finance and the Bank of Japan co-led the third ASEAN+3 Task Force meeting, with technical officials from ASEAN, China, Japan and South Korea.
- Greater use of local currencies in cross-border payment initiatives was on the agenda, as authorities look at making transactions between Asian economies more efficient.
- The talks in Puerto Princesa did not announce a new cross-border payment system or a new financing facility, and are described as ongoing technical work on existing mechanisms.
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Why it matters
- constraint A regional backstop whose size and drawing conditions are not public cannot be counted against a committed bilateral facility, so the cost of shock funding for an Asian borrower is unchanged by this meeting.
- decision Retrofitting CMIM, AMRO and the ABMI roadmap is where the region's technical capacity is going; no new regional payment rail is being staffed out of this process.
- precedent Admitting Timor-Leste would require agreeing contribution and access terms for a new member, which is the kind of document in which CMIM's numbers become public.
The operative word in the CMIM part of the agenda is institutionalize. A facility that exists as a standing rule, with a ceiling and a written access test, is something a finance ministry can count on in the first week of a funding squeeze. Officials discussed plans to institutionalize the CMIM Rapid Financing Facility, alongside lessons from the 17th CMIM Test Run and work on a new financing structure [4].
The quantities in the account are both ordinals: the third task force meeting, the 17th test run [1][4][11]. The facility's size, and the conditions a member has to meet to draw on it, are not in Crowdfund Insider's report [11]. What 17 run-throughs do mean is a practised procedure: a drawdown request with a form, a sequence, and officials who have run it before.
The payments track and the bond-market track aim at the same outcome. The meeting discussed wider use of local currencies in cross-border payment initiatives, with the aim of transacting across the region without relying exclusively on conventional currency settlement channels [3][8]. It also reviewed the next roadmap for the Asian Bond Markets Initiative, which aims to deepen local-currency bond markets [6].
The report describes the discussions as ongoing technical work on mechanisms the region already has, and no new cross-border payment system and no new financing facility came out of them [9]. Staff time is going into CMIM's existing facility, AMRO's rolling medium-term implementation plan, the ABMI roadmap, the Disaster Risk Financing Initiative, and the question of Timor-Leste joining CMIM and AMRO [4][6][7]. The framework itself was built after the Asian financial crisis [10].
In my view the region is building process here, and process does not give a treasurer a number to work with this quarter. Drills and surveillance are how a facility becomes drawable at all, and the record shows both: a 17th test run, and AMRO's medium-term plan under review [4][6].
What to watch
- Whether institutionalization of the CMIM Rapid Financing Facility arrives at ministerial level with a published ceiling and a written access test.
- Whether Timor-Leste's accession to CMIM and AMRO is agreed, and on what contribution terms.
- Whether any ASEAN+3 local-currency payment link moves from the task force agenda to a live commercial settlement rail.