southeast Asian finance ministers agreed here Thursday to open up their capital markets further and ease money flows as part of a road map toward a single market in the region.

Association of southeast Asian Nations (AsEAN) ministers at their annual talks in Manila agreed on a "road map for integration in financial cooperation" that would serve as a cornerstone for the AsEAN common market by 2020, an official said.

It comprises broad steps to develop, liberalise and integrate the region's capital markets and financial services to bring about "a free flow of goods, services and investments and a freer flow of capital," according to a draft joint statement to be issued at the end of the two-day meeting later Thursday.

The road map is to be tabled for approval by AsEAN leaders at their annual summit in Bali in October, AsEAN secretary-General Ong Keng Yong said.

AsEAN aims to achieve a single market -- dubbed the "AsEAN economic community" -- of 530 million people in 17 years. The group comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, singapore, Thailand and Vietnam.

The ministers agreed that member states be "more transparent and systematic" in relaxing restrictions on capital movements as part of regional financial integration efforts, the draft said.

At the same time, they would put in place "prudential measures in each step of their capital account liberalisation process, where neces-

sary, to minimise the possible adverse impacts of the reversal of capital, particularly short-term, flows."

Much of southeast Asia's financial sector continues to recovers from a financial crisis in 1997/98 which plunged the region into its worst recession in decades.

The crisis was sparked by a currency meltdown, first in Thailand and then spreading across Asia, as excessive speculation and volatile short-term capital flows undid much of the economic progress made over many years.

As the level of development in the financial fronts of member states is not the same -- with singapore, Malaysia, Thailand and the Philippines ahead of the others -capital market integration will be undertaken in two phases, officials said.

Over the next five years, it will be

mostly confined to "capacity building" -- beefing up the legal and regulatory framework, market infrastructure for trading, clearance and settlement procedures, investor education and adoption of international standards.

After that, members will move fully into "market integration," including setting up a common regulatory and legal framework, removal of restrictions on crossborder investment, adoption of common accounting methodologies and standards, and linkages in payment and settlement systems.

"With such a road map, we at least have an action programme for ourselves and we know what to do according to a time frame," Ong said.

"If some countries are not ready to go ahead, we can hear each other out but continue working towards the goal."