‘After joining RCEP, Philippines now open for business’

MANILA, Philippines — The Philippines is now open for business and on an accelerated post-pandemic economic recovery following the Senate’s ratification of the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade grouping, Trade Secretary Alfredo Pascual said yesterday.

Pascual issued the statement at the signing ceremony of the resolution concurring with the ratification of RCEP by Senate President Juan Miguel Zubiri that was approved by the chamber late Tuesday and will be sent to Malacañang.

He said the country’s entry into RCEP would make full use of the landmark economic legislation like the Public Services Act, Retail Trade Liberalization Act, Foreign Investments Act and the Corporate Recovery and Tax Incentives of Enterprises Act.

“If we did not join RCEP, it is reversal of what we wanted the world to see that we are open for business, a counter signal if we were not able to get the RCEP ratification,” Pascual said.

He said the RCEP, which allows exporters, businesses and micro, small and medium enterprises (MSMEs) access to much larger markets, would accelerate the country’s recovery from the COVID-19 pandemic.

“The way to recover is to stimulate investments, strengthen our MSMEs and let our suppliers supply to bigger businesses,” Pascual said.

The RCEP is a free trade agreement between members of the Association of Southeast Asian Nations and their FTA partners Australia, China, Japan, New Zealand and Korea, with a combined population of 2.3 billion or 30 percent of the world’s population with a total Gross Domestic Product of around $38,813 billion or 30 percent of the global GDP.

The Philippines was the last to join RCEP.

Zubiri cited the entry of a major maker of batteries for public electric vehicles as one immediate effect of the Senate’s ratification of RCEP. He said the investor was in the country last week to explore the possibility of putting up an exporting hub.

Without RCEP, the batteries emanating from the Philippines would be slapped higher tariffs by importing countries and the investor was thinking of setting up the plant in Indonesia.

But because of the ratification, the business group will be back next week to start working on putting up a manufacturing hub in the country, he said.

Sen. Loren Legarda, principal sponsor of the resolution, said if the government follows the guidelines from the Senate on how to make agriculture and other industries more competitive, the country may overturn its global trade deficit.

“It is true that agriculture in the Philippines has suffered for decades not only from neglect but also, frankly, from corruption and mismanagement. Government set up safety nets and budgets to make us competitive but the trade deficits have remained and the agriculture sector remained stagnant. The ones who produce our food cannot help but feel betrayed,” Legarda said.

She said the Departments of Agriculture and of Trade and Industry have repeatedly reassured farmers that only 33 agricultural tariff lines covering 15 products are contained in the RCEP for importation and while some of them will have immediate zero tariff, the others will only be zero after 15 to 20 years.

“Our most sensitive products will not be affected. As a matter of fact, many of our produce are already covered by earlier free trade agreements. This is only equivalent to 1.9 percent of the total agricultural tariff lines or 0.8 percent of the total imports,” she said.

Legarda, who chairs the Senate oversight committee on the RCEP, said she would convene the panel in the next months to check the implementation of government programs.

She reminded all concerned agencies to ensure their budget plans for 2023 will take into account the RCEP.