CEBU, Philippines - Cebuano businessmen are encouraged to strengthen regional penetration and supply chain as the ASEAN integration shifts business paradigm to intra-regional trade.
In his recent visit to Cebu, economist Cielito Habito said ASEAN member countries should not see themselves as competitors--but as one united economy conquering the world market.
Habito said that it is not enough for Filipino businesses to just guard their turf on Philippine grounds as the ASEAN market will open up a greater arena for business with the intent of penetrating the world market as a region.
"We are part of the ASEAN, in fact the Philippines is part of the original five. ASEAN is not them its 'we'. ASEAN countries cannot afford to quarrel with each other," said Habito,
This early, at the home front, he said Filipino businessmen should strengthen and boost their supply chain to complement with other countries as the 'coopetition" environment will emerge.
In general, he emphasized that Philippine businesses should 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 Habito.
With this, firms need to focus on improving supply design and strategic location of various business functions, and make strategic partnership with complementary businesses around the region, or the world.
Likewise, 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 as largely intra-industry in nature, noting that countries trade products belonging to the same industries such as electronics, vehicles and chemicals.
The dramatic growth of trade in intermediate goods with the development of global value chains, said the country's respected economist, who is also the former secretary of the National Economic and Development Authority.
Habito said there are more intra-regional trade within Asia, especially South East Asia.
On the other hand, he also warned that if businesses are not ready with the intra-regional trade paradigm, they will not be able to cope with the expected disruptions of the supply chain, and that they must also carefully examine and be ready to face the downside of this opportunity. (FREEMAN)