Pinoy entrepreneurs urged to learn more about econ integration

MANILA, Philippines - As the Asean economic integration draws ever closer, government trade officials and industry leaders are urging Filipino entrepreneurs, especially micro, small, and medium enterprises (MSMEs), to take a more proactive approach in finding out exactly how free trade agreements work and how these FTAs can be used to their advantage.

There is no point in pretending that the Asean Economic Community is not going to happen, said Senen Perlada, director of the Bureau of Export Trade Promotion of the Department of Trade and Industry (DTI), as he urged domestic enterprises to prioritize the study of using the AEC and FTAs to sharpen their competitive edge and grab a bigger slice of the global market pie.

In fact, the impact of the Asean free trade pact on regional trade and commerce is slowly but increasingly being felt as early as now, even before the AEC’s formal launch in 2015, said Perlada during his speech at a forum held recently in Makati City on doing business using FTAs.

Jay Yuvallos, a member of the Asean Business Advisory Council (ABAC)-Philippine Chapter, agreed as he pointed out that tariffs have already been removed or reduced from 95 percent of product lines within the region.

 â€œThe AEC is not a destination but a process that will go beyond 2015,” said Perlada. What is imperative now is for SMEs to gather as much useful information on FTAs as possible and plan how to play the FTA card to their advantage, he and Yuvallos said.

For instance, local companies can do research on what products are in demand in countries with whom the AEC has free trade deals and meet that need, using the preferential tariff matrix to offer more attractive prices, said Perlada.

Manufacturers should also remember that the AEC converts the region not just into a single market but into a single production base as well. This opens up opportunities to expand and diversify product lines through the import of raw materials with zero or reduced tariffs from FTA member-countries, or to set up manufacturing sites in FTA areas with attractive investment incentives.

Both Perlada and Yuvallos also advise traders, dealers, and manufacturers to attend the business education sessions currently being undertaken by public-private business groups to fill their knowledge gap on FTAs.

What’s good about these FTAs is that they adhere to a rule-based trading system, said Perlada. By knowing and following the rules, domestic businesses can avail themselves of preferential tariffs and other FTA benefits. 

At the same forum, Sergio R. Ortiz Luis Jr., president of the Philippine Exporters Confederation (PHILEXPORT), agreed that the export industry is an”obvious beneficiary of globalization.” But he also acknowledged that MSMEs will have to make the necessary adjustments to realize the perks of this system. As such, exporters’ groups like PHILEXPORT are collaborating with DTI and other business organizations to ease the MSMEs’ participation in the new regional trade order. 

Among the common services they have developed together are those to do with advocacy, bank credit assistance, one-stop export and import documentation, and training to enhance technical capacities, work skills, and quality standards.

 For his part, Walter Van Hattum, head of the trade section of an EU delegation to the Philippines, stressed that the European Union is keen to invest in the Philippines. But beyond an active participation in the FTA system, the country can further raise its investment profile among European investors by improving the internal business climate through greater transparency, an enhanced infrastructure network, and a real crackdown against corruption.