Philippines in strong position for AEC 2015: economist

BUSINESS AND TRADE

Carlito Dar

BAGUIO CITY --Philippine industry stakeholders need not worry about the ASEAN Economic Community (AEC) 2015 as the country’s economy is in good position in terms of competitiveness.

So said economist CielitoHabito, USAID Trade-Related Assistance for Development chief, during the Department of Trade and Industry – led Industry Roadmap and AEC Localization for Competitiveness: Cordillera Regional Roadshow at Baguio Country Club last week.

Habito said in terms of income or output, the country’s 2014 GDP (Gross Domestic Product) of 6.1 percent was the fastest in ASEAN and second globally.

Other indicators of sound Philippine economy, he said, are stable prices even after disasters,  better job generation with unemployment down to  six percent and 1.05 million new jobs generated in the past year, based on October 2014 labor force survey.

Habito said  Cordillera is a relatively industrial region with the industry sector (mainly in the Baguio Economic Zone) contributing half of the Gross Regional Domestic Product or GRDP.

He noted Cordillera is strong in agri-business (coffee and vegetable), eco-tourism, education services, electronics, financial services, health care and wellness, Information technology and IT enabled services, and mining.

Habito  said AEC 2015 is not something to fear as trade liberalization through Free Trade Area agreements has been ongoing with 99.6 % of all tariff lines already brought down to zero since 2010.

“December 31, 2015 is not a doomsday but a mere target for 100 percent compliance; no drastic changes will happen on January 1, 2016”, he said.

With AEC 2015, there is more complementation, less competition and a wider market.

ASEAN comprises  600 million people and adding up the other free-trade agreements the Philippines has entered, the market expands to 3.45 billion or around half of the world population.

The challenge now, Habito said, is bringing in needed safeguard legal/policies and administrative reforms; public investment on the infrastructure gaps especially in the energy, transport and ICT sectors,  as well as the strengthening of the sector of health, education and human resource development particularly on entrepreneurship.

Strengthening and expanding the role of Small and Medium Enterprises (SMEs) and strengthening the country’s climate change and disaster resiliency are also important, Habito added.

He also outlined the need of finding the strategic position in cross-border value chain/production network; shifting business model to inclusive value chains; and the teaming-up into cluster and unite to gain larger market opportunities.

The bottom line, he said, is the need for people, the planet (environment) and profit  to work harmoniously to help make inclusive growth and sustainable development a reality.