Businesses urged to boost efficiency of supply chains in preparation for Asean integration

MANILA, Philippines - Philippine businesses are urged to enhance the efficiency of their supply chains to seize the opportunities offered by regional and global production networks as the Asean integration starts next year.

“Find strategic positioning in cross-border value chains/production networks,” said Cielito Habito, chief of Party on Trade-Related Assistance for Development (TRADE) project of the US Agency for International Development (USAID), in an employers’ conference.

Habito said firms need to focus on improving supply design and strategic location of various business functions.

He stressed that the strategic deployment of skilled labor and strengthening access to financing from integrated regional capital markets are crucial in capturing value from regional and global value chains.

Habito also advised businesses to study expansion opportunities considering the wider consumer base rather than wider competition.

He said Philippine trade with other Asean members is largely complementary.

“With trade relationships in Asean being increasingly complementary rather than competitive, trade protection can be self-penalizing,” he added.

Habito also described Asean trade largely intra-industry in nature, noting that countries trade products belonging to the same industries such as electronics, vehicles and chemicals.

He underscored the dramatic growth of trade in intermediate goods with the development of global value chains.

Habito said there are more intra-regional trade within Asia, especially South East Asia.