THE Asian Development Bank (ADB) said the last mile toward the Asean Economic Community (AEC) might be the most difficult part in the process.
Speaking before a foreign chambers-hosted event, dubbed as “Joint Economic Briefing: Challenges and Opportunities for the Philippine Economy,” ADB Regional Cooperation and Integration Division-Economic Research and Regional Cooperation Department Director Arjun Goswami said the four pillars of the integration are close to 80-percent completed.
Goswami said the four pillars of the integration—which include a single-market, equitable economic development, competitive economic region and global integration—are now anywhere between 70-percent to 77-percent complete.
However, he said that nontariff barriers would now become a sticking point among the Asean member-economies.
“Every country has issues on trade facilitations. Nontariff barriers can cause delays,” Goswani said, while citing as an example the regulations on quarantine checks.
Tariffs have been reduced to 0.54 percent among the Asean member-economies, with the Big 6, which includes the Philippines, only having 0.04-percent tariff across the board.
Still, Goswami said he is optimistic on the prospects for the Philippines once the integration fully kicks in.
“There is work to be done, and there has to be a push on the manufacturing sector. But the best sign is to look at the competitive issues, and see where the Philippines is when compared to the other Asean countries,” Goswami said.
European Union (EU) Delegation Head of Economic and Trade Section Walter Van Hattum is also optimistic on the AEC prospects.
“There are huge opportunities for the European Union to do business in the AEC. The GDP per capita was at 15 percent over the last three years. It has an extremely young population and has a rising middle class,” Van Hattum said.
Van Hattum added that EU has €156 billion in investment in the Asean region. He also said that they now have free-trade agreements (FTAs) with Singapore and Vietnam, while negotiations are ongoing with Thailand and Malaysia.
The Philippines and the EU are concluding the scoping part of the FTA.
For his part, British Chamber of Commerce Philippines (BCCP) Chairman Chris Nelson said the AEC would force some changes for the Philippines.
“The Philippines must open up and accept the challenges. It should welcome competition, as it will strengthen the market. With the integration, there will be opportunities to sell in a bigger market,” Nelson said.
The joint economic briefing was organized by the BCCP, French Chamber of Commerce and Industry in the Philippines, German-Philippine Chamber of Commerce and Industry Inc. and the Spanish Chamber of Commerce in the Philippines. – by Rodel Alzona –
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