THE Philippines intends to prioritize forging trade agreements with its neighbors in Southeast Asia in order to circumvent limitations in the Asean free trade agreement, according to the National Economic and Development Authority (Neda).
In a Senate hearing on the proposed national budget for 2024, Socioeconomic Planning Secretary Arsenio M. Balisacan said the Philippines has not been as aggressive in terms of crafting bilaterals and must endeavor to fast-track these agreements.
Balisacan said this is a strategy employed by Viet Nam which led to its current position as “the center of the world in terms of investment” given its aggressive efforts in forging bilateral trade agreements with various countries.
“The [priority] is to speed up negotiations with many countries, not only the US [United States] or EU [European Union] but even our neighbors because there is so much limitation with Asean,” Balisacan said.
Balisacan earlier said this will increase the opportunities to generate more jobs for the country’s rapidly growing labor force.
He also said attracting more investments and maximizing trade opportunities with various markets globally through bilateral trade agreements will also elevate the country’s growth potential to 6.5 to 8 percent from the current 6 percent.
Balisacan noted that without quality jobs, the Philippines will have a difficult time reducing poverty. The aim of the current administration is to bring poverty incidence down to single-digit levels by 2028.
He added that increasing investments and quality jobs also supports the goal of the Philippines to become a first world economy by 2040. This can be attained if the country consistently posts a GDP growth of 6.5 to 8 percent.
Last February, Neda expressed its strong support for the Regional Comprehensive Economic Partnership Agreement (RCEP).
Neda said that based on the 2021 trade data from the International Trade Center, under the RCEP, only 15 agricultural commodity groups corresponding to 33 tariff lines will have lower tariff rates compared to some Asean+1 FTAs.
This is equivalent to only 1.9 percent of the total 1,718 agricultural lines and only 0.8 percent of the total agricultural imports. Of these 33 tariff lines, 17 are raw materials, 8 are intermediate products, while only 8 are final goods.
The remaining agricultural tariff lines will have equal or higher rates compared to other Asean+1 FTAs, or are excluded from import tariff concessions under the RCEP.
The Philippines is currently exporting a number of products for which concessions were secured (e.g., preserved pineapples, pineapple juice, chocolate) and securing better market access for these products through RCEP opens the possibility to further widen the market base in these countries.