Leveraging on APEC

The world’s largest economic bloc by GDP, the Asia Pacific Economic Cooperation (APEC), will hold its economic leader’s meeting this coming Oct. 31 in the historic city of Gyeongju, South Korea. Gyeongju is Korea’s ancient capital and center for culture. It is home to multiple UNESCO World Heritage sites.

The Philippines is a founding member of APEC back in 1989. Today, APEC counts 21 members, including economic heavyweights such as the US, China, Canada, Australia and Russia – all of whom have borders that face the Pacific Ocean.

APEC was formed to advance economic integration and promote shared prosperity across the Asia-Pacific. The bloc works to facilitate the seamless flow of goods, services, investments and people across borders. This has been achieved by streamlining customs procedures, enhancing business environments and unifying regulations and standards.

South Korea too is among APEC’s founding members. The north Asian nation hosted the 3rd APEC Ministerial Meeting in 1991, which led to the adoption of the Seoul Declaration. For those unaware, the Seoul Declaration is a commitment to open regionalism, economic cooperation, sustainable growth, economic cooperation, trade liberalization and free investment flows.

In 2005, South Korea hosted the summit again, wherein the Busan Roadmap was drawn. The Busan Roadmap established clear steps towards trade and investment liberalization, capacity building for developing economies and structural reforms towards increased competitiveness.

This year’s summit carries special significance since it is held at a time of heightened geopolitical and economic uncertainty, primarily triggered by President Trump’s tariffs. The summit’s theme is: “Building a Sustainable Tomorrow: Connect, Innovate, Prosper.” Hence, we can expect APEC members to chart a new vision and roadmap for the Asia Pacific amid US tariffs, a growing trend towards protectionism and geopolitical tensions brought about by multiple global conflicts.

The summit has multiple objectives – to strengthen connectivity among members through physical, institutional and people-to- people exchanges; to promote digital innovation by narrowing the digital divide and AI cooperation and to pursue sustainable growth through collective responses to global issues.

The meeting in Gyeongju will be particularly meaningful since Presidents Trump and Xi Jinping are expected to hold a bilateral meeting on the sidelines. This will mark the first US-China bilateral talks in Trump’s second term. It also positions South Korea as the stage for historic negotiations.

The Philippines at APEC

The Philippines hosted the APEC Summit two times – in Subic in 1996 and in Manila in 2025. The two summits resulted in the 1996 Manila Action Plan and 2025 Inclusive Growth Agenda, both of which put the Philippines on the APEC map.

As of yesterday, there has been no firm announcement as to whether President Marcos will be attending this year’s summit. However, in a phone call with South Korean President Lee Jae Myung last August, PBBM said that he “looked forward to meeting Lee at APEC 2025.”

The Philippines has long benefited from APEC’s many initiatives. It gained access to Asia-Pacific markets with tariffs slashed significantly from 17 percent in 1989 to some five percent today. This boosted Philippine exports of electronics, semiconductors and agriculture products. APEC policies have also ushered in investments in the manufacturing, IT-BPO and infrastructure sectors, particularly from Japan, South Korea and the US. More significantly, it has eased the movements of Filipino OFWs and professionals across the Asia-Pacific.

But while the Philippines reaped many benefits, it failed to truly capitalize on APEC’s potentials in the way its neighbors have – particularly Vietnam, Malaysia and Thailand.

Expensive power and logistics costs, corruption and red tape have blunted Philippine economic competitiveness and the development of its manufacturing sector. As a result, Philippine investment intakes and exports pale in comparison to those of its neighbors. Reforms relating to competition policy, regulatory transparency and good governance are slow and not fully implemented. And although APEC supports SMEs in cross-border e-commerce expansion, the lack of government support in digital advancement and financing have caused Filipino SMEs to remain insular and unable to conquer foreign markets.

The Duterte and Marcos administrations, having been too preoccupied with politicking, failed to prioritize the structural reforms needed to allow the Philippine economy to fully leverage on the opportunities APEC offers. In fact, investment conditions have worsened, with corruption reaching new heights of impunity.

To truly harness the benefits of APEC membership, the Philippines must prioritize a reform agenda aimed at boosting competitiveness. These are the top six reforms:

Energy sector reform is paramount. High electricity rates continue to cripple manufacturing investments. Transparent regulation, renewable energy expansion and improved grid efficiency are urgent.

Infrastructure and logistics modernization must be fast-tracked. Congested ports, inadequate airports and poor connectivity across islands have raised trade costs – addressing this requires sustained public-private partnerships and streamlined project approvals.

Anti-corruption, transparency in public biddings and governance reform should be institutionalized. Investors must be assured of a level playing field.

Digital transformation and SME empowerment deserve greater focus. With e-commerce driving regional trade, SMEs need government support in financing, digital literacy and cross-border platforms to expand beyond domestic markets.

Labor and education reform must align skills with future industries. Stronger STEM education, vocational training and lifelong learning will help Filipinos become more competitive.

Finally, regulatory and competition policy reform is vital. Excessive bureaucracy and restrictive laws deter innovation and discourage investment. Clearer rules, streamlined permits and genuine competition policies will level the playing field.

These six reforms, if pursued with political will, can transform the Philippines from a marginal APEC participant into a true engine of Asia-Pacific growth.

APEC brings enormous opportunities for the Philippines but the country’s present set of leaders are simply not taking full advantage of it. Let us hope the country’s next set of leaders in 2028 will do so.

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Email: [email protected]. Follow him on Twitter @aj_masigan