MANILA, Philippines - Philippine businesses are not prepared for the upcoming Association of Southeast Asian Nations (ASEAN) regional economic integration, according to BDO Unibank Inc. president Nestor Tan.
During a forum organized by the Management Association of the Philippines, Tan expressed the view that protecting the country’s agricultural and financial services sectors, as well as the labor sector, would be necessary to be ready for the AEC community by 2015.
Tan said that while some businesses see the ASEAN Economic Community (AEC) to be established in 2015 as an opportunity, he is of the view that the integration would be more of a threat to local firms.
“I think Philippine industries are not ready yet,†he said.
This, as he noted that many Philippine companies are not trading actively with countries in the ASEAN.
Many Philippine firms, he said, are trading with firms from China and the US. He also noted that the country still lacks a vision or policy direction for local industries, and given constitutional and legislative restrictions, Philippine companies are not ready for the AEC.
To be able to prepare, Tan said, it would be important for the government to focus on protecting the agricultural sector as food is a basic necessity.
He said government needs to protect the financial services sector as well “because it fuels the economy and greases movement of resources around.â€
As labor is also a strength of the country, the government will likewise need to protect that sector to be competitive, the BDO official said.
The AEC would allow for freer flow of goods, services, labor, investments as well as capital in ASEAN.
An economist, in the same event, noted that as ASEAN countries are moving toward regional integration, they would have to to strengthen regional and national financial safety nets by raising the committed amount to the Chiang Mai Initiative as well as work on deeper financial cooperation to be able to address challenges to growth.