The Department of Trade and Industry (DTI) said a delay in the Philippines becoming a party to the mega free trade deal Regional Comprehensive Economic Partnership (RCEP) will be a missed opportunity for the country to generate more trade and investments which are badly needed towards recovery from the pandemic.
Allan Gepty, DTI assistant secretary in a press briefing said the Philippines need to fasttrack the process of depositing its instrument of ratification of the RCEP to make the country a party to the deal and reap the benefits as soon as possible.
DTI Undersecretary Ceferino Rodolfo for his part cited the observations of economists who noted the importance of determining the net benefit of RCEP for the Philippines.
An estimate of 2.2 percent upside in the gross domestic product is expected with the RCEP.
Trade can be affected by 52 percent because the Philippines is well integrated in the global value chain especially exports of electronics which account for 62 percent of exports.
Economists also fear a scenario where investors will shy away from Philippines and jobs will be lost or opportunities are missed while these investors go to those countries that are part of RCEP.
Gepty concurred with the observation saying competitor-countries in Asean would have access to cheaper raw materials and inputs under RCEP, strengthening further their manufacturing sector
He said early ratification will also send a strong signal to investors of a stable business environment as part of RCEP which sets a rules-based trading system.
Hearings are ongoing at the Senate which has to concur with President Duterte’s ratification of RCEP.
DTI Secretary Ramon Lopez expressed hope the RCEP can be presented and passed at the Senate plenary by this month.
“We hope to finish the concurrence process the soonest possible time so that the Philippines can already deposit its Instrument of Ratification, and be one of the first set of economies to benefit from the Agreement once implemented by early 2022, as targeted,” Lopez said.
Based on 2020 data, the RCEP free trade area accounts for 29 percent of the world’s trade, 29% of world’s GDP, 33 percent of global inward foreign direcy nvestments (FDI), 47 percent of global outward FDI, and 2.3 billion population. – Irma Isip
