To prepare for ASEAN integration: Private sector pushes for new services agenda

CEBU, Philippines - The private sector recommended the initiation of a new services agenda, and improved trade and investment in services as a strategy to improve the competitiveness of the Philippines in the upcoming Association of Southeast Asian Nation (ASEAN) economic integration in 2015. 

Doris Magsaysay Ho, a private sector representative of the Asia-Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC), said that the promotion of a new trade in services agenda can take the country to an “even greater” strategic leap given its abundance in human capital.

Ho, who is also the Magsaysay Inc. and Magsaysay Maritime Corp. President and Chief Executive Officer, spoke during the 2nd National Business Conference of Independent Business Clubs and Chambers held at Marco Polo Plaza Cebu.

Although trade in services is significantly lower than trade in goods, she cited that the former is a good opportunity for the region since a 10 percent reduction in services transaction costs is equal to an additional US$100 billion to Gross Domestic Product across APEC. 

In the last three decades, she noted that the services sector  contributed 66%  to the overall GDP growth of the Philippines.

Output share increased to 55% in 2010 from the 36.1% recorded in 1980 while labor share went up o 52.1% in 2011 compared to 32.8% in 1980.

The country, she added, showed shifts in its economic landscape toward the services sector when globalization made a number of service jobs tradable in the global market. 

“The Philippines has captured a significant share of the IT Services market. It also continues to pose growth in demand for contractual services such as nurses and seafarers,” she said. 

However, Ho said that services trade still experiences lagged growth since it is difficult to trade than goods with its markets as inherently problematic and its industry encounter new impediments in market access, regulatory environment, efficiency of implementation and business environment. 

She then advised the Philippine government to work on its too little attention, policy defensiveness and reluctance to open services markets that raise business costs and hurt the competitiveness of the country.

In terms of overall openness in APEC, a study of the University of Southern California showed that Singapore tops as the most open market while Philippines ranks the least open. 

ABAC further suggested launching a new and dedicated initiative aimed at liberalizing and facilitating regional services trade and investment, commissioning an APEC-led tripartite services expert group and committing to substantially improve the region’s official statistics on services production, employment, productivity, trade and investment.

“With the ASEAN Integration and the Philippines hosting APEC in 2015, let us be reminded that we are sellers and not consumers. A concrete and transparent strategic business plan and vision for the Philippines to become a key supplier of services is a key step in the process, a country road map to inspire us all towards a common vision,” Ho stated. 

The initiation of a new services agenda is among the key recommendations in the ABAC 2012 Report to Leaders for this year.

Other priorities include regional economic integration, supply chain connectivity, investment promotion in infrastructure, food security, and growth for small, medium and micro enterprises. (FREEMAN)