Phl industries not ready for ASEAN integration, biz leaders warn

MANILA, Philippines - Filipino businessmen are concerned that local businesses might get the short end of the stick once trade liberalization goes full force with the impending integration of economies in the Association of Southeast Asian Nations (ASEAN).

"We're not ready yet in terms of agriculture," said Cherrie Atilano, co-founder and president of the Gawad Kalinga Enchanted Farm Agricool,  during a session at the World Economic Forum on East Asia in Makati City.

Atilano cited the price of rice in the Philippines, which is higher compared to prices in India and ASEAN neighbor Cambodia. Trade liberalization entails that Filipino farmers will have to compete with cheaper rice from other countries, which will enjoy lower tariffs in an open market. This might lead to the Philippines favoring cheaper rice from abroad, which will disadvantage local farmers, she said.

Philippine Long Distance Telephone Company Chair Manuel Pangilinan, who was also a panelist in the session, also voiced out his concern with the 2015 ASEAN Economic Community. The Philippine sugar industry, for example, is weaker in production compared to Thailand, he said.

"How does the industry respond to open market where tariffs will drop?" he said.

Pangilinan added that the ASEAN Economic Integration slated next year should be clear with particular policies such as the mobility of labor and open skies, where local carriers will directly compete with foreign airlines.

Tourism Secretary Ramon Jimenez, meanwhile, said Philippine companies will respond positively when faced with competition.

"Ultimately when our corporations are put in a decidedly more competitive environment, they actually do better," he said, adding that initial misgivings in the country's pocket open skies policy in 2011 turned out to be unwarranted.

He said the Philippine market is still discovering things, but he admitted that issues in infrastructure and connectivity should be addressed to maximize trade liberalization.

Pangilinan said that unlike in South Korea where the government shoulders the cost of connectivity, the private sector in the Philippines provides the infrastructure needed for development.

Marife Zamora, chair of Convergys Corp. in the Philippines agreed. "We cannot leave everything to government," she said.