MANILA, Philippines — People often ask me why I remain such a firm believer in ASEAN. The usual answers are fundamentals like size and demographics: eleven countries and nearly 700 million people. That matters, but it is far from the main reason. My main reason is continuity.
What ASEAN has built
Let me start with the record, because it is better than most people realize.
Lower tariffs, more trade. In 1992, ASEAN agreed to build a free trade area. Today, more than 98 percent of tariff lines traded among members carry zero duty, up from 69 percent in 2009. Trade followed. Trade among ASEAN members grew tenfold, from $82 billion in 1993 to $823 billion in 2024. ASEAN’s total trade grew from $430 billion to $3.8 trillion over the same period, and reached $4.4 trillion last year.
Open skies, more travelers. ASEAN citizens have travelled visa-free across the region under a framework agreed in 2006, and ASEAN’s open-skies agreements, which the Philippines completed ratifying in 2016, opened routes between member countries. Together with the rise of budget airlines, the effect was dramatic. In the decade to 2019, air passenger traffic in Southeast Asia more than doubled to 510 million, and international arrivals to ASEAN grew eight percent a year, against five percent globally, to 138 million. Today, fellow ASEAN nationals make up 38 percent of all visitors to the region.
Open services, more competition. Under the ASEAN Framework Agreement on Services and the ASEAN Banking Integration Framework, members opened their financial sectors step by step. In 2014, the Philippines allowed foreign banks to own local banks fully. Within five years, twelve foreign banks had opened branches in Manila, including Singapore’s United Overseas Bank and Malaysia’s CIMB.
Next, digital. The ASEAN Digital Economy Framework Agreement, concluded in Manila in May and due to be signed in November, will be the world’s first region-wide digital economy agreement. ASEAN-cited studies estimate it could help lift the region’s digital economy to as much as $2 trillion by 2030.
Guardrails against political risk
Now put yourself in the shoes of an investor looking at the Philippines. Our politics can be volatile. Presidents serve a single six-year term, our parties are weak and each new administration arrives with its own priorities and a clean slate of programs. An investor is entitled to ask: what stays the same?
ASEAN is a large part of the answer. Our tariff commitments, customs procedures, rules of origin and services commitments are not renegotiated every election. Since last year, every ASEAN member has been clearing certificates of origin and customs declarations through a shared electronic system, the ASEAN Single Window. Commitments like these are guardrails. They narrow the range of what volatile politics can change and that makes risk easier for investors to price.
Think of it this way. If you were designing an economy, you would build some guardrails at home, such as an independent central bank. Others you would build with your neighbors. ASEAN is where many of ours are built. Even when governments change frequently, we know we are bound to these rules and guidelines, and that gives investors comfort. It gives policymakers discipline, too.
That is why I am a supporter of ASEAN. Not only because it gives us a bigger market, but because it gives us continuity and stability.
Why ASEAN should put RCEP to work
But ASEAN has a limit, and we should be honest about it. Trade among members has grown in value but is stuck as a share of the total. It rose to about a quarter in the 2000s and has since slipped to 21 percent. The reason is structural. Within ASEAN, we are complementary parts of the same puzzle. We trade components and commodities with one another, assemble them and ship the finished goods elsewhere. We cannot easily sell final goods to each other. The buyers for our finished goods are beyond ASEAN, and many of them are in RCEP.
The Regional Comprehensive Economic Partnership joins ASEAN with China, Japan, South Korea, Australia and New Zealand. ASEAN already trades $1.3 trillion a year with those five partners, far more than the $823 billion it trades with itself. Across RCEP, about half of what members export goes to other members. Within ASEAN, it is about a fifth.
RCEP is also built differently from the alternatives. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership includes only four ASEAN economies. RCEP includes all ten of ASEAN’s established members, and it is the first agreement to bring China, Japan and Korea together under one set of rules.
Most important, RCEP held when the storm hit. After the United States announced its “Liberation Day” tariffs in April 2025, trade among ASEAN, China, Japan and Korea did not fall. It grew by an average of 10.6 percent year on year through the rest of 2025. Trade among RCEP members reached a record of about $6 trillion for the year, even as the bloc’s combined trade with the United States fell by about 3.5 percent. When protectionism rose elsewhere, RCEP became a safe harbor.
That is why I want ASEAN to put its RCEP membership to work. The most immediate step is to extend DEFA to RCEP. RCEP’s own rules on digital trade are thin, and its first general review begins in 2027. ASEAN should table DEFA as the basis for a digital chapter covering all fifteen members, and Manila can hand that proposal to Singapore, which chairs ASEAN next year. The same logic applies elsewhere. Our open-skies agreements, which already reached Europe through the first bloc-to-bloc air deal in 2022, and our QR payment links, which now reach Japan, Korea and China, should become RCEP-wide to extend our gains.
Singapore’s foreign minister, Vivian Balakrishnan, put it well at the Milken Institute Asia Summit this month. “We are going through turbulent weather,” he said. “By definition, we are small, except for Indonesia. The more we can raft our economies, the better we can cope with high waves and strong winds.” He called for deeper integration within ASEAN and wider partnerships beyond it. ASEAN is our raft. RCEP ties it to bigger ones.
For the Philippines in particular, this matters more than for most. We do not have strong political parties to carry policy from one administration to the next. ASEAN has been the constant that investors could count on, whoever won the last election.
Guardrails that reach further
The argument comes down to three steps. ASEAN has delivered: lower tariffs brought more trade, open skies brought more travelers and open services brought more competition. Those commitments now work as guardrails, keeping the Philippines steady through changes in government. And because our best customers sit beyond ASEAN, the next step is to extend those guardrails to RCEP, starting with DEFA.
Politics in our part of the world will keep changing. The task is to make sure the rules of the region do not, and to make them reach as far as our markets do.