Phl lags in Asean integration groundwork

CEBU, Philippines - The Asean Economic Community (AEC) will move in full swing a little over two years from now, but with the way the Philippines is making progress in implementing the AEC Blueprint, the country may be far ready from embracing a tariff-free, borderless trade in the region come 2015.

In a report published by “Economic Monitor,” a regular publication of the Institute for Development and Econometric Analysis, Inc. (Idea), a 2013 study by the Philippine Institute for Development Studies revealed that the country is lagging in implementing measures for the single market and production base requirements of the AEC Blueprint.

Low performance

According to the published report, the Philippines obtained an implementation rate equal to 95 percent for Phase 1, translating to 104 of 110 measures already in place for that phase.

The country obtained a low 73 percent mark for Phase 2, implementing only 96 out of 131 measures for that phase.

While the Philippines performed superbly in the first half of this year, marking 7.8 and 7.5 percent of growth in the first and second quarters, respectively, this feat of growth is not seen to directly translate to the country’s readiness for the economic integration.

Ed F. Limtingco, a business columnist of this paper, said that as a member of the Association of Southeast Asian Nations (Asean), the Philippines is expected to be prepared for the said integration.

“Unfortunately, very little is heard from the government and the populace, in general, regarding efforts to meet the AEC 2015 launch,” he said.

Limtingco in his column wrote that while AEC will facilitate introduction of new avenues for trade and widen the market for the country’s products, it will prove to be more of a threat rather than an opportunity since the country is not actively trading with most Asean countries.

The report from Economic Monitor stressed that local small and medium enterprises will be the ones largely affected by the integration owing to their constrained access to financing, knowledge, skills and technology.

Homework

Further, while the country seems to be attracting more investors, the concern on below-par foreign direct investments (FDIs) still has to be addressed, the report said. 

The foreign investment cap has good intentions, but it may also send the wrong signal that the Philippines is not yet entirely open to foreign investments, especially that there has been lack of action to amend it .

Another serious homework that the country has to work on is its infrastructure.

Efficient road networks, transport systems and power sources are instrumental to delivering goods and services more capably, but the report said the Philippines suffers from “poor infrastructure” and several delayed implementation of projects.

According to Idea’s researchers, there are notable projects under the public-private partnership thrust of the Aquino government whose progress have been put on hold.

AEC’s objective

The AEC is advocated by the Asean member-nations in order to better meet its goal of a highly competitive and stable economy in the region.

Its establishment first declared in 2003, the AEC hopes to unify the 10 member-nations as a single production base and market that would assist economic development and global incorporation.

The 2015 Asean integration is also seen as an effort to keep pace with emerging markets like China and India and to direct the investors’ attention towards the region.

The AEC was initially scheduled for launch in 2020, but was moved forward to the start of 2015. Finally in 2012, Asean leaders pushed back the launch of the community to the end of 2015 to give the members more time to adjust and make necessary changes.

AEC Blueprint, containing the AEC vision, goal and timetable, has been adopted since 2007. (FREEMAN)