Adopting key Asean measures to benefit more Filipino SMEs

MANILA, Philippines - Overall, the Philippines has shown its commitment to the Asean  Economic Community (AEC) blueprint as indicated in the relevant measures it has implemented from 2008 to 2011, but there is still room to speed up its progress as 2015 nears.

These are the findings of a paper assessing the rate of Philippine compliance with the AEC program. The study titled “The Asean Economic Community and the Philippines: Implementation, Outcomes, Impacts, and Ways Forward” was conducted by the think tank Philippine Institute for Development Studies (PIDS).

It said there would be benefits for the Philippines if it could accomplish more of these AEC measures that address key institutional weaknesses bridling the competitiveness of the private sector.

The paper indicates that priority measures due for implementation focus mostly on the free flow of goods, particularly speeding up services liberalization, customs integration, ratification of transport protocols, and setting of standard and conformance measures and harmonized regulatory regimes for certain products.

At the same time, the study evaluated the implementation of the 2010-2015 Asean  Strategic Action Plan for SME Development which aims to improve the business and investment-enabling environment for small and medium enterprises (SMEs).

Of these measures, services liberalization is expected to be the most difficult to undertake since it entails changing certain Philippine laws or constitutional provisions.

Critical measures for customs integration include developing advance ruling systems for tariff classification and value assessment, and implementation of the Asean  customs declaration document.

Finalizing transport protocols and pacts refers to those under the Asean  Framework on the Facilitation of Goods in Transit. It also requires upgrading the country’s infrastructure.

On SME development, the review said: “Simply put, the overall business environment in the Philippines is still not conducive to SME development. Costs of doing business are still high in the Philippines, and they are likely to be even higher for SMEs. But that also means that any improvement in the country’s business environment would yield even more substantial benefits to SMEs.”

Author Melanie S. Milo recommended to increase SMEs’ access to finance, allow them to penetrate new markets and maintain and expand existing ones, and raise their level of productivity and efficiency.

She urged increasing the pace of implementation, noting that further delays would be “costly for the country,” since AEC measures are designed to be applied progressively over time, building one on top of the other.

The AEC blueprint was adopted in November 2007 to serve as the master plan to guide the establishment of the AEC by 2015, particularly the trade bloc’s key characteristics and elements, as well as the action plans and strategic schedules to achieve them.