The Establishment of a Unified ASEAN Monetary System Following the European Model: Is it Legally Feasible?

• Main Author: Heffron, James Keith C.
• Format: text
• Published: Animo Repository 2023
• Subjects: ASEAN; monetary system; Banking and Finance Law
• Online Access: https://animorepository.dlsu.edu.ph/res_cbrd/14; https://animorepository.dlsu.edu.ph/context/res_cbrd/article/1019/viewcontent/business_notes_and_briefings_v11n1.pdf
• Institution: De La Salle University

For the last several decades, the drive towards globalization has influenced most of the world’s economic and fiscal direction. Regional cooperation therefore is a natural step towards this thrust. For many years, many sectors have been clamoring for a unified monetary system in the ASEAN patterned after the European Monetary System, the same system that gave birth to the Euro – the European Union’s regional currency. The main benefit of having a regional unified monetary system is price and currency stability. This in turn would result to an accelerated economic growth in the region especially in developing members such as the Philippines. However, the question is – will the current legal frameworks within the ASEAN allow the establishment of an ASEAN Monetary Authority through a unified ASEAN central banking system following the template of the European System of Central Banks? Using the doctrinal and comparative approach, the article exposes the major legal hurdle that prevents the establishment of this unified authority - the member states’ strong legal adherence to monetary sovereignty - a solid doctrine deeply engrained in each of their domestic laws. The article then uses the same approach to present a clear understanding of this major legal hurdle and advocates an openness to its revision, hopefully paving the way for the establishment of a legally feasible unified ASEAN monetary authority.