Jul 11, 2014

Philippines - PH not ready for ASEAN economic integration, must catch up fast – MVP

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MANILA, Philippines - “We are not ready.”

This was the blunt assessment of business leader Manny V. Pangilinan on the Philippines’ readiness for the ASEAN economic integration in 2015, warning that the Philippine government must now act to prepare local industries, specially the agriculture sector, to compete in the new economic regime.

The PLDT chairman admitted he is worried that the Philippines has not grasped the wide-ranging impact ASEAN Economic Integration will have on jobs and income.

The Philippines has committed to integration by 2015, which aims to create single market and production base and to develop ASEAN as a highly competitive economic region.

An ASEAN Economic Community (AEC) briefing paper identified the following areas of cooperation: human resources development and capacity building; recognition of professional qualifications; closer consultation on macroeconomic and financial policies; trade financing measures; enhanced infrastructure and communications connectivity; development of electronic transactions through e-ASEAN; integrating industries across the region to promote regional sourcing; and enhancing private sector involvement for the building of the AEC.

“In short, the AEC will transform ASEAN into a region with free movement of goods, services, investment, skilled labor, and freer flow of capital,” the AEC briefing paper added.

While the objectives are laudable, Pangilinan said the country should be aware of the impact on jobs, income and food security.

“Frankly – we are not ready for this ASEAN Economic Integration,” Pangilinan said in an interview with TV5.

Using the Philippines’ sugar industry as an example, Pangilinan pointed out local producers will not be able to survive the onslaught of cheaper priced imports. “If tariffs go down by the end of 2015 as mandated by the ASEAN Free Trade Agreement – then we have the ability to import sugar that is much cheaper from Thailand,” Pangilinan said, warning “so paano yun? It will kill the sugar industy.”

Nonetheless, he said the government can still act: “Will we allow the sugar industry to get slowly killed by that kind of regime?” and added, “By making our sugar industry more efficient, we can be competitive. Otherwise, we’ll just be out of business.”

Impact on labor, incomes

The bigger concern is the impact on jobs and individual income.

“The practical realities are really very serious. I mean, you could be putting people out of work, right,” he said, “that’s where the rubber hits the road, isn’t it?”

He is skeptical as well on the claim that ASEAN Economic Integration will promote mobility of labor, specially skilled labor and health workers, among member countries. He believes each country would come out with regulations to protect their own workers.

Using Philippine doctors and nurses as an example, Pangilinan expressed concern that other ASEAN countries would come up with policies favoring their own nationals first for skilled jobs.

“Will there be, as a matter of regulation, a requirement to be accredited in the ASEAN countries? There lies the possibility of lack of mobility,” he said, adding that “because one particular country, I would imagine . . . will try to protect its own doctors and nurses.”

Maricel Halili

Business & Investment Opportunities 

Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. 

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