There is significant potential for the Philippines to be a leader in the Asean capital markets and investment community, but there are challenges to overcome, says Teresita Herbosa, chairperson, Securities & Exchange Commission at The Asset's Asean Capital Markets and Investment Summit.

"The Philippines is in and out of the Asean capital markets community you could say," adds Herbosa. "It is because we are active participants in all the meetings and committees and even at the signing agreement ceremonies. We have clearly taken an interest. But sadly the Philippines is out of the capital market initiatives such as the Asean Collective Investment Scheme (CIS) Framework and important trading links," she notes.

Asean's Collective Investment Schemes (CIS), the cross-border funds passporting framework that includes Singapore, Malaysia and Thailand, is now operational. The initiative, which allows fund managers operating in the three nations to distribute fund products across borders to retail investors via a streamlined process, marks the first successful launch of a regional passport scheme. Currently, the Philippines and Thailand became part of the consultation process to join the framework.

Regarding the Asean Trading Link, a business-to-business arrangement in which participating exchanges are interconnected through an electronic network for cross-border trading and order routing while each exchange maintains its independence, Philippine Stock Exchange expressed its intention to participate but has not yet put the plan into action. As of January 2015, only three exchanges were interconnected via the link.

Just like the European Union took years to integrate its banking and economic systems, and is still in the process of developing them, Asean will probably take the same amount of time and if not longer, according to Herbosa.

"The EU took many years for it to fully integrate, and they still face challenges. Asean is in its beginning of integrating its capital markets, and we have a long time to go and it is far from being complete.

Despite the fact that the Asean community faces significant challenges in fully integrating their capital markets, the Asean community is focused on its objective according to Herbosa.

Herbosa cites the recent developments of the Asean Economic Community (AEC). She says that the AEC will continue to chase the goal of regional economic integration by 2015. Herbosa AEC envisages a single market and production base, (b) a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy.

There is demand for local-currency funding, and ample sources to meet that demand right here in Asean. But connecting the two dots - and creating a pan-Asean market - has not been as simple. While each of the Asean 6 markets has blossomed successfully, they have done so in different ways, and at different speeds.

We need to continue to "connect the dots" says Herbosa when discussing the future of the Philippines in the Asean capital markets community.

"How to connect the dots is the main question. The matters for discussion are so dynamic and are evolving in a positive direction, but in times they may overlap and sometimes they are divergent. And it seems there is no way to connect the dots. But with time and work, we will make it happen," adds Herbosa