LIBERALIZING trade in services in Southeast Asia will increase the demand for semi-skilled Filipino workers, according to a trade expert.
In an Asian Development Blog published by the Asian Development Bank (ADB), Kakali Mukhopadhyay of the India-based Gokhale Institute of Politics and Economics said this is one of the benefits of trade liberalization.
Mukhopadhyay said there is a strong argument to liberalize services in the Association of Southeast Asian Nations (Asean) since members generate 37 percent to 74 percent of their GDP from services.
“Thailand and the Philippines could experience the highest demand rise for semi-skilled laborers, including those engaged in agricultural activities. These economies will have structured gains based on the general orientation of these economies which could provide cost advantage in their trade relations,” Mukhopadhyay said.
She explained that Asean services exports grew 12.5 percent to $291.9 billion in 2013, from $113.6 billion in 2005.
Over the same period, services imports increased 9.9 percent to $298.6 billion from $140.7 billion.
As such, Mukhopadhyay said service trade liberalization can be beneficial to economic growth and job generation. Estimates showed that it could increase GDP by $29.6 billion in the region.
This will be fueled mainly by a $14-billion surge in exports and $36.8-billion increase in imports across the region.
“The gains are not restricted to trade-related estimates but also brings possible welfare gains, particularly when seen in agreements of Asean with Japan and Republic of Korea,” Mukhopadhyay said.
She added that the Asean-India services and investment agreement also provides opportunities for Asean nations to access India’s markets in energy, transport and logistics.
India, meanwhile, will benefit from greater access to Asean markets in terms of consultancies, software, maintenance and installation, education, health and social work.
“The agreement illustrates how liberalization in trade can bring about positive spillovers in employment, particularly in trade and transport industries across all the countries,” she added.
In September, the Department of Finance said improving numbers for trade in goods and trade in services bodes well for the country’s economic growth.
DOF said the surplus in trade in services and income grew 11.3 percent on the back of higher remittance inflows and business-process outsourcing earnings.
DOF said in GDP terms, this means trade in services surplus grew to 12.9 percent of GDP or $21.79 billion in 2019 from 12.3 percent of GDP or $19.58 billion in 2018.