MANILA, Philippines - BDO Unibank president and CEO Nestor V. Tan said the amount of benefits presented by the imminent Asean Economic Integration (AEI) depends on various standpoints, which if overlooked, may impact on the competitiveness of economies of the member-countries.
At the recently held Nikkei Asian Review Forum in Manila where he was among the panelists, Tan zeroed in on the implications of the AEI on the government, consumers and industry.
At the government level, he said the AEI would clearly make the Philippines and the other Asean-member countries more relevant in the grand scheme of things because “they will have a stronger voice as one block rather than as individual nations”.
For the consumers and the population at large, an integrated economy grants them a bigger market with more opportunities, better goods and services.
“This comes with lower tariffs and free flow that would ease the supply chain across borders,” added Tan.
The third angle, which for him is not really being discussed thoroughly, is the effect of AEI on the industries.
“What you would find in an integrated economy is that the stronger industries in other countries tend to win out and the weaker industries tend to get marginalized. In the Philippines, I don’t think we have really made an assessment on how to strengthen our industries to cope with an integrated economy,” Tan said.
While ultimately it is the consumers who would benefit from integration with better goods and services, he said one question remains and that is “would there be enough income generated in one country to take advantage of this?”
“If it is more beneficial to put up a shop in country x, naturally there would be more jobs created in that country at the expense of the other countries. It is not a bad thing but the industries should really look at what is necessary to strengthen their own,” he explained.
Tan cited as an example the local banking industry, which should have a close coordination with the regulators and the executive and legislative branches of the government, to make sure it has the enabling laws and regulations to establish a stronger banking industry.
“This would allow the industry to create jobs for a regional market rather than moving jobs offshore for regional banks doing business in the Philippines,” he said.