The Philippine Chamber of Commerce and Industry (PCCI) welcomed the Senate’s ratification of the Regional Comprehensive Economic Partnership (RCEP) Agreement.  In a letter to the Senate President Miguel Zubiri, PCCI President George T. Barcelon said that RCEP “will play a key role in sustaining the Philippines growth trajectory, provide unparalleled opportunities for Philippine businesses and prime the country for further economic growth and development.”

 

The RCEP is a free trade agreement among the ten member states of ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) and its five FTA partners (Australia, China, Japan, New Zealand and the Republic of Korea).  It covers several areas of cooperation and aims to liberalize trade by eliminating 90 percent of tariffs within the participating economies, while the others will be gradually reduced within a 20-year period.  Based on World Bank’s data, the Agreement is expected to benefit 2.3B people or 30 percent of the world’s population, contribute US25.8 trillion or 30 percent of the global gross domestic product, and account for USD12.7 trillion global trade in goods and services and 31 percent of global foreign direct investment inflows.

 

“Joining the RCEP will benefit our exports as they can now more openly access the world’s fastest growing area.  Furthermore, it eases and provides growth opportunities for intra-regional value chains, which will also boost our goal to bring in foreign investments,” Barcelon emphasized.

 

Global value chains (GVCs) on electrical and machinery, petroleum and chemicals, metal, textile and apparel, and transport equipment dominate the GVCs in RCEP.  This is especially beneficial for the Philippines, which has comparative advantage on these products, particularly electrical and machinery, and transport equipment, which are some of its top export products.

 

To maximize its opportunities, Barcelon said the government must align the country’s industrial and domestic trade and investment policies with the RCEP’s strategic goals of greater economic openness while at the same time provide safeguards so that the concerns, especially of the agriculture sector are properly addressed.

 

“Countries which have ratified the RCEP agreement are already seeing increases in their overall trade in just one year after its entry into force in early 2022.  Among the 10 ASEAN Member States, only the Philippines and Myanmar have not yet ratified the Agreement,” Barcelon added.  Rhuby Conel, Donna Angulo