CEBU, Philippines - Despite the opportunities given by the existing Free Trade Agreements (FTAs) that the Philippines has entered into with Japan, China, South Korea, Australia, New Zealand, and the 10 member states of ASEAN, many businesses including in Central Visayas failed to take advantage of this favorable development.
A study made by the Asian Development Bank (ADB) showed that only about 20 percent in the Philippines utilize the FTAs.
According to ADB, lack of information was the key impediment in the utilization of FTAs, followed by delays and administrative cost.
The multiplicity of rules of origin (ROO) also hindered wider use of FTAs particularly by Small and Medium Enterprises (SMEs), because they raise transaction cost for firms and SMEs have less ability to meet these high transaction cost.
ADB paper suggested that the Philippines should address the impediments on the use of FTAs so that the regional economy would be able to maximize the benefits offered by the agreement.
Based on the Central Visayas Regional Development Plan report, the aside from low utilization of FTAs, another factor that slows down the expansion of region’s productive sectors is the failure of agriculture, industry and services to maximize the opportunities offered by the global market.
The report indicated that many of the local producers in Central Visayas have failed to generate new markets for their products thereby limiting their capacity to expand.
The challenge of the region now, while it is aiming to hit a remarkable growth in the next six years, is to develop new economic growth drivers that would generate full, decent, and productive employment.
The presence of the FTAs opened new markets for the country’s goods and services, which businesses can tap to facilitate the expansion of their operations.
The FTAs have also provided preferential tariffs making it easier for local businesses to import intermediate materials needed in manufacturing their final products so that they can be competitive.
Earlier, DTI-7 regional director Asteria Caberte urged the Cebuano business community to fully take advantage of the FTA’s saying despite previous series of information drive events held by the government led by DTI, Cebuano exporters and importers in particular still have not maximize the incentives offered by FTA’s.
On the other hand, the Phil Federation of Exporters of the Philippines (PhilExport-Cebu) earlier said that although, there are already existing bilateral agreements with economic powers such as the Japan’s Japan-Philippine Economic Partnership Agreement (JPEPA) and China’s Common Effective Preferential Tariff (CEPT), which exporters have to seriously take advantage with, PhilExport-Cebu executive director Fred Escalona said that it would be very beneficial for exporters if they are given wider choice.
Likewise, DTI secretary Gregory Domingo urged exporters to take advantage of the trade bilateral agreements inked by the Philippines in other countries, specifically in ASEAN region in order to survive in the stiff global competition.
Although, the Philippines, still has to sign bilateral agreements with giant economies like the United States and Europe, Domingo said exporters or Filipino businessmen in general should find out the different bilateral agreements signed by the Philippines with other countries, as there are growing number of them.
At present, the biggest agreement the country has made is with Japan, through JPEPA, soon Domingo said the Philippines will have bilateral agreements with European Union (EU) and the United States.
“The Philippines is the lowest in terms of availing of the tariff advantages offered by several agreements with countries. Exporters are not taking advantage of this. Maybe because for the lack of knowledge or information,†Domingo said. (FREEMAN)