Asean integration opens expansion opportunities for Phl firms, says NEDA

MANILA, Philippines - The integration of the economies of the Association of South East Asian Nations (ASEAN) would provide an ideal investment site and production hub, for local businesses seeking to jumpstart their expansion in the region, according to the country’s top economic manager.

Socio Economic Planning Secretary Arsenio M. Balisacan likewise said that the ASEAN Economic Community (AEC), set to take effect next year, would open innumerable opportunities for Philippine businesses.

“Businesses in the Philippines can engage more in intra-regional trade, increase their market access within and outside of ASEAN, and expand their production capacities in the course of the ASEAN integration,” he said.

The 10 ASEAN member nations are Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand, Vietnam and the Philippines.

The region has a large market of approximately 600 million people, with a combined gross domestic product (GDP) of $2.2 trillion in 2011.

Balisacan added that more opportunities for investors and producers of goods and services are expected due to easier movement of goods, services, investment, capital and labor in the region.

That is due to the planned integration which will break down trade and tariff barriers among member nations.

ASEAN is a major producer of palm products such as rubber, coconut, abaca, pineapple and mango products, and rice.

Balisacan, who is also director general of the National Economic and Development Authority (NEDA), also cited a report from the United States International Trade Commission (USITC) on the trade performance of the ASEAN over the years.

“The USITC noted that the region’s outward orientation in trade and investment has been particularly important in driving its international trade, growth and development,” Balisacan said.

He emphasized that the Philippine government has already set its key roadmap strategies towards AEC 2015, all outlined in the Midterm Update of the Philippine Development Plan (PDP) 2011-2016.

“These strategies are aimed at building credible institutions, equalizing development opportunities, creating new growth drivers, and accelerating infrastructure development,” Balisacan said.

However, there remain a number of challenges to be able to take full advantage of AEC 2015.

The Asian Development Bank (ADB) for instance, hinted that ASEAN integration may not be attained by 2015.

“The December deadline will not see ASEAN achieving all AEC targets in 2015.  And it will still involve more work for post-2015,”  ADB lead economist of the Office of Regional Economic Integration Jayant Menon said.

Among the challenges are: elimination non-tariff barriers like closing loopholes that permit misuse of rules that have been made for goods, like sanitary and phytosanitary rules on food and anti-dumping regulations; removing border barriers such as quantitative restrictions, border administration, and even closures; removing behind-the-border constraints related to logistics, transport, infrastructure bottlenecks, and weak institutions; and adopting harmonized standards on competition policy and intellectual property rights (IPR).