Freeman Cebu Business

AEC: Are all sectors ready?

EUROPE BEAT - Henry J. Schumacher - The Freeman

As we are getting very close to the ASEAN Economic Community we have to realize that the name of the game is competitiveness. Philippine companies like all firms operating in ASEAN must find the means of enlarging their economic position, alone or in partnership with other regional or international players. EU companies, leading in technology, are ready to go into such partnerships.

Let’s look at some sectors:

Mining   Industry

ASEAN member states are mineral rich and mining is playing an increasingly important role in the Region’s economic growth. In Indonesia, Southeast Asia’s largest economy, mining now accounts for 12% of GDP.

Even as global demand has eased, Asia’s locomotive economies continue to drive ASEAN’s fast developing mining sector – unfortunately not in the mineral-rich Philippines. It is trusted that the next administration taking control on 1 July 2016 will fully implement and enforce the provisions of the existing Mining Act, especially its environmental protection measures and provisions on post-mine rehabilitation, introduce an internationally competitive fiscal regime for mining, and ensure consistency of local ordinances with regulations, decisions and policies of the National Government.


Southeast Asia, a region of around 600 million people, with a combined GDP of US$ 2.1 trillion, is not only a vast and developing market, it is also bound by the dynamic economies of China, India, South Korea and Australia. Facilitation of trade is vital for all ASEAN countries, which occupy an area at the heart of these leading global manufacturers. Trade among member countries themselves is steadily increasing with intra-trading expected to increase to 30% of total trade.

As a result, transport and logistics have become big business in Southeast Asia, with some 275 publicly listed companies involved in the sector. Their total combined revenues reached US$ 140.8 billion. For the Philippines this means to accelerate the implementation of transport PPPs and overcome legal objections swiftly; the Philippine government has to address cost, quality and competitiveness issues in domestic logistics.


The aim of the ASEAN Single Aviation Market is to foster a competitive airline industry and propel the Region’s carriers into the global market. It is a strategy that seeks to increase market access, establish central authorities and industrial standards, for a sector that is undergoing unprecedented expansion. Open skies will yield a host of opportunities for ASEAN members by removing obstacles to growth, such as restrictive airspace and route constraints. In the Philippines, the decision has to be made to expand Clark and modernize NAIA, provide night-landing equipment to 14 airports, and improve civil aviation regulation.

This has to include the implementation of the two-airport strategy (NAIA and Clark) and move budget airlines / budget flights from NAIA to Clark. In order to move passengers from Manila to Clark, initially a fast-transit bus system should be considered, while making the rail link possible.


Sustained investment in information and communication technology is proving to be one of the most potent drivers of development for emerging economies. The strong focus on ICT development is having a significant impact on the ASEAN region. There is a master plan to deliver ICT as an engine of growth for all member states and to establish the Region as a global communications hub.

The Philippines telecoms and IT market is estimated to contribute more than 10% to the country’s GDP, boosted by the exponential development of mobile telephony. The Philippines is a leader in business process management and will have to improve its telecoms infrastructure / broadband if it wishes to maintain that position. Additionally, if the Philippines wants to benefit from Big Data (and it should want this), the implementation of the Data Privacy Act is more than overdue.


Health spending in Southeast Asia is expected to double in real terms over the next decade, outstripping GDP growth, as governments seek to improve standards and widen the scope of care available. There are wide variations in the Region. Several ASEAN members have passed laws to establish national health insurance systems and mandated universal coverage, including the Philippines. 

An integrated ASEAN market in healthcare consisting of harmonized standards, registration and evaluation, mutual recognition of qualifications and cross border cooperation greatly expand regional healthcare facilities, stimulating growth of a vital sector. European companies, active in the healthcare sector, are ready to be part of the solution to bring healthcare to Filipino patients fast and effectively.


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