Finance ministers and central bank governors of Asean-member countries, China, Japan and South Korea expect recovery from the pandemic-induced global recession in the near term even as they remain on guard for lurking downside risks especially as the COVID-19 pandemic remains.

“Our efforts to contain the pandemic have enabled us to gradually lift restrictions on economic activities, depending on the pandemic situation of respective economies. Economic growth is projected to fall sharply for many economies this year, but we expect our economies to rebound going forward,” read their joint statement issued at the end of the 23rd Asean+3 Finance Ministers’ and Central Bank Governors’ Meeting held virtually on the sidelines of the Asian Development Bank’s (ADB) annual meeting Friday.

“While the outlook remains uncertain this year, we welcome the green shoots of recovery in our economies. Meanwhile, we will remain vigilant to the continued downside risks on the horizon given the uncertain trajectory of the COVID-19 pandemic,” they said.

“We are taking steps to reduce vulnerabilities to these risks and are determined to continue to use all available policy tools to support the sustained recovery of our economies. We will carefully measure the appropriate timing of the exit from these pandemic measures in accordance with the economic and pandemic situation of each member, to avoid a cliff effect and safeguard growth and financial stability in the Asean+3 region. We will remain resolute in our commitment to uphold an open and rules-based multilateral trade and investment system, and strengthen regional integration and cooperation,” they added.

Specifically, the finance ministers and central governors in the region agreed to further enhance the Chiang Mai Initiative Multilateralization (CMIM) established 10 years ago by increasing the International Monetary Fund (IMF) “de-linked” portion to 40 percent from 30 percent at present; institutionalizing of both voluntary demand-driven domestic currency contributions in the CMIM for requesting and providing parties, and clarifying the CMIM conditionality framework for the IMF de-linked portion in order to implement it smoothly. De-linked refers to the portion of the borrowings approved for a member-country that can be drawn without being subjected to IMF lending conditions.

Also, the ministers and governors agreed to sustain the progress made in the Asian Bond Markets Initiative aimed at fostering local currency bond market development “to mitigate currency and maturity mismatches and to mobilize the region’s savings to finance long-term investment across the region,” they said.

They also supported the Southeast Asia Disaster Risk Insurance Facility (SEADRIF), to which the Philippines is a signatory.

In May last year, Finance Secretary Carlos Dominguez III, on behalf of the Philippine government, and Japanese Deputy Prime Minister and Finance Minister Taro Aso signed in Tokyo the memorandum of understanding to establish SEADRIF together with other Asean member-states.

SEADRIF is a regional insurance facility aimed at providing immediate financial response when calamities strike in disaster-prone countries like the Philippines.