ASEAN Facts

The closer we get to January 1, 2016, when the AEC will officially commence, more and more industry sectors in the Philippines are asking the same question: are we ready? Let’s look at a few statistics I found on the website of ASEANEXCHANGES.org:

Household income going up – ASEAN as a region will be the 3rd largest with household income of US$ 10,000 or more in 2018. This is good for investors in consumer products and real estate.

High Smartphone penetration – Singapore has the fourth highest smartphone penetration in the world, with 73% of its population online and is the most mobile payment ready member state, followed by the Philippines, Malaysia and Thailand. For the Philippines, new markets via the smartphone are coming up: access to finance and healthcare.

Tourism – a key growth sector in ASEAN – In 2012, ASEAN was the fastest growing destination-region in the world, followed by South Asia. The Philippines has so many options to grow the tourism sector but infrastructure needs to be established urgently (airports, seaports for cruise ships, roads, etc.) and security and connectivity issues need to be addressed.

The ASEAN expansion of international retail brands – Six out of the top ten countries where international retailers intended to open stores in 2014 are in ASEAN. This is also important for tourism development. The Philippines could be much more attractive if the rules for retail operations by foreign companies would be eased. Only H&M has made the decision to enter the Philippines since 2001 (all others are using franchise arrangements).

Vehicle Sales – The 6th largest single marketplace for vehicles sales in the world is expected to be ASEAN by 2018. The Philippines has quite some catching up to do, getting investments in infrastructure organized, getting the automotive market from manufacturing to spare parts going, and taking the old vehicles off the road.

A boom in the trade of medical devices – ASEAN’s medical device market, which was worth about US$ 4.6 billion in 2013, is expected to double to US$ 9 billion by 2019. The Philippines will fully participate in this boom with more money allocated to healthcare and universal healthcare being one of the legacies of this administration.

Rich reserves of natural resources–ASEAN is ranked third largest producer in the world of oil and natural gas; 90% of all natural rubber and a quarter of the world’s rice production is grown in the Region. The Philippines is one of the leaders in mineral resources which this Administration wants to keep untouched underground while poverty is suffered aboveground. Responsible mining is obviously misunderstood.

Foreign ownership – ASEAN has registered considerable progress in loosening the restrictions on foreign ownership of companies in various sectors. The Philippines has more to do to welcome and subsequently get foreign direct investments and should revisit the Foreign Direct Investment Negative List and the economic provisions of the Constitution.

Are we ready???

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