A lot of work remains to be done for the Philippines to be ASEAN
integration-ready, a PLDT top official says
MANILA,
Philippines – "It’s like an unexpected present wrapped in brightly colored
paper: It looks very nice, but you don’t really know what’s in it."
This is
how Philippine Long Distance Telephone Company (PLDT) president and CEO
Napoleon Nazareno described the planned economic integration of the Association
of Southeast Asian Nations (ASEAN) by 2015.
The ASEAN Economic Community (AEC) envisions the free
movement of goods, services, investment, skilled labor, and freer flow of
capital among the 10 ASEAN member states: Brunei Darussalam, Cambodia, Lao PDR,
Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and
Vietnam.
Nazareno
said AEC is double-edged as it presents both risks and opportunities.
In his
speech on the first day of the 2nd Asian Business Conference
Thursday, June 26, Nazareno cited the vulnerability of Philippine agriculture
and small and medium enterprise (SME) sectors to the AEC. SME development is
one of the two priorities under the AEC’s equitable economic development plan.
(READ: 'Agri,
SME sectors not ready for ASEAN integration').
Nazareno
also said that governments still have so much to do in terms of enacting
enabling legislation and putting in place needed institutional reforms.
"The
provisions outlined in the AEC blueprint and related agreements require
modifications to domestic laws. Delays in the implementation of these changes
may put a country at a disadvantage," he said.
A lot
remains to be done to eliminate trade barriers such as the lack of physical
infrastructure and non-standard regulatory policies, Nazareno said.
SMEs,
agriculture at risk
On the
other hand, there is the prospect of ASEAN companies gaining access to a
regional market for their goods and services. Such will lower costs and raise
revenues for these companies, making them more internationally competitive than
if they focused solely on their respective national markets, Nazareno said.
Citing
a recent Deutsche Bank study, Nazareno said there is the risk that margins may
come under pressure due to increased competition as ASEAN companies jostle for
space in each other’s markets.
The
companies that face the most risk are small enterprises that do not have
sufficient resources to expand their regional presence, Nazareno pointed out.
The
dangers of opening up markets are particularly visible in the case of
Philippine agriculture, Nazareno said.
"Filipino
farmers have been reminded of this by the recent misfortunes of crops like
rice, garlic, and coconut, which highlight the vulnerabilities of Philippine
farming to competition from ASEAN neighbors,” Nazareno said. (READ: Machines
on PH farms: Catching up with ASEAN integration).
The
private sector needs to prepare for an integrated ASEAN market, he pointed out.
But as
cited by businessmen at the Asian Economic Congress held in Jakarta last April,
there is a need to educate businesses most especially SMEs. (READ: 'ASEAN
integration an opportunity, not a threat to PH SMEs').
While
AEC’s success rests on the assumption that all the ASEAN member states have
done their homework and diligently prepared for the setting up of a single
market, "this is a generous assumption given that ASEAN does not have an
enforcement mechanism to check on member compliance," Nazareno said.
Foreign
ownership
Meanwhile, in order to fully integrate with ASEAN neighbors, economist Cielito Habito said the Philippines has to open up its investment policy, particularly in the services sector.
At the National Competitiveness Council Dialogue, "Getting Ready for AEC 2015," Thursday, Habito said the AEC framework calls for at least 70% ASEAN ownership in professional and financial services.
"That is yet to be done to a large extent because of constitutional restrictions," he said.
He also urged the National Economic and Development Authority to look at the restrictions in the Foreign Investment Negative List. "Ideally if we can open up the (investment) environment the way the neighbors have, we can unleash much more FDI (foreign direct investment)."
He said that while FDI into the Philippines has almost quadrupled per year from $1 billion to $3.9 billion, countries in the region are averaging about $6 billion.
"There is real constraint because of the basic law. It all boils down to more openness," he said.
Meanwhile, in order to fully integrate with ASEAN neighbors, economist Cielito Habito said the Philippines has to open up its investment policy, particularly in the services sector.
At the National Competitiveness Council Dialogue, "Getting Ready for AEC 2015," Thursday, Habito said the AEC framework calls for at least 70% ASEAN ownership in professional and financial services.
"That is yet to be done to a large extent because of constitutional restrictions," he said.
He also urged the National Economic and Development Authority to look at the restrictions in the Foreign Investment Negative List. "Ideally if we can open up the (investment) environment the way the neighbors have, we can unleash much more FDI (foreign direct investment)."
He said that while FDI into the Philippines has almost quadrupled per year from $1 billion to $3.9 billion, countries in the region are averaging about $6 billion.
"There is real constraint because of the basic law. It all boils down to more openness," he said.
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated
in Singapore since 1994.
No comments:
Post a Comment