RP has no plan to pull out of Asean — DTI exec

The Philippines has no intention of pulling out of the Association of Southeast Asian Nations despite seeming differences with other ASEAN members over several moves toward further trade liberalization and regional integration.

This was stressed over the weekend by Trade Undersecretary Thomas Aquino who disputed allegations contained in a recent report issued by an international consulting firm that the Philippines seems to be breaking away from the rest of its ASEAN neighbors.

According to Aquino, the Philippines’s continued participation in the ASEAN "is a given."

International consulting firm McKinsey had recently been contracted to undertake a study of ASEAN competitiveness. In its preliminary report, McKinsey noted that the Philippines appears to be breaking away from ASEAN following its stand on trade liberalization and general integration.

For instance, Trade and Industry Secretary Manuel Roxas II has been calling for a more deliberate pace of trade liberalization that all member countries could comfortably sustain.

According to Roxas, "liberalization is generally good, but some members might more than others readily benefit from being part of the bigger market."

Roxas argued that "others might not be able to open up as quickly since the downside of liberalization more readily impacts them than the liberalization success story does."

As such, Roxas said, "while the Philippines would like to contribute to the common good of ASEAN, we should not be forced to throw in more commitments than we can afford at the moment."

The McKinsey report, Aquino said, is not yet final as it has been submitted for comment by the ASEAN members.

Among the recommendations of the McKinsey study is to come up with a number of possible sectors like electronics, consumer goods and tourism which would be identified as strategic sectors and subjected to an intensive regional integration program.

This would involve the rapid elimination of tariffs on the various goods – both upstream and downstream items – related to the industries.

The McKinsey study also recommends that non-tariff barriers should also be torn down and all kinds of facilitation should be provided for the identified sectors.

Doing so, the McKinsey study pointed out, would allow ASEAN to become a more tightly integrated and unified market.

The McKinsey study had found out that the cost of doing business in ASEAN was unnecessarily high with consumer goods manufacturers incurring cost amounting to 15 percent of sale due to different product standards and customs red tape.