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Economy

PHL likely to miss out on RCEP opportunities as ratification deferred

TRUCKS transporting containers leave a port in Manila, Philippines, May 25, 2016. — REUTERS

By Revin Mikhael D. Ochave, Reporter

THE PHILIPPINES is likely to lose investment opportunities to other Southeast Asian countries if it continues to delay the ratification of the Regional Comprehensive Economic Partnership (RCEP), Trade Secretary Ramon M. Lopez said on Thursday.

“Any delay in ratification means that we run the risk of losing some export markets and the good opportunities in new investments as they shift to participating countries who are already part of the RCEP system,” he said in a Viber message to reporters.

“There may be lost opportunities in investments, and jobs for our people, investments such as in agribusiness, manufacturing for exports, and services.”

The Trade chief made the statement after the Senate on Wednesday failed to give its concurrence to the RCEP before it adjourned sine die despite repeated appeals from economic managers and business groups.

Senate Foreign Relations Committee Chairman Senator Aquilino Martin L. Pimentel III said it would be up to President-elect Ferdinand R. Marcos, Jr. to endorse the mega-trade deal to the Senate when the 19th Congress opens next month.

“The 19th Congress (will) wait for (Office of the President) to endorse the said treaty again to the Senate,” he said in a mobile message to BusinessWorld.

Mr. Pimentel said there was no vote on the RCEP since only 17 senators were present during plenary on Wednesday. The trade deal needed 16 affirmative votes to be ratified by the Senate.

“Two senators are abroad, one quarantined, two went out. In short, many members were not on the floor. We didn’t want to deprive them the chance to participate and or vote on the measure,” he said.

The RCEP, which entered into force on Jan. 1, is a trade agreement involving Australia, China, Japan, South Korea, New Zealand and the 10 members of the Association of Southeast Asian Nations (ASEAN). 

The Philippines is one of three countries that have not ratified the RCEP, along with ASEAN members Indonesia and Myanmar.

Mr. Marcos previously said he wanted to review the trade agreement to protect the local agriculture sector.

While it was “unfortunate” the Senate failed to act on the RCEP, Mr. Lopez remained optimistic that incoming senators will ratify the trade deal.

“RCEP has the support of the incoming economic team and we understand that it will be in their priority agenda… I can only hope for the early ratification in the next Congress. We leave this for the next administration and next Congress,” he said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message the delay in the RCEP’s ratification could slow economic recovery, in terms of lower foreign direct investments and exports.

“Since RCEP is the world’s largest free trade agreement (FTA), the country’s membership in RCEP would be a consideration for foreign investors in able to access other RCEP member countries’ export markets at zero or reduced tariffs,” he said.

Makati Business Club Executive Director Francisco “Coco” Alcuaz, Jr. said in a Viber message the incoming Marcos administration should push for the country’s participation in the RCEP to boost trade and investments and create more jobs.

“This is one policy President-elect Marcos should consider leveraging his election win to get and send an open for business signal to the region. The sooner we ratify RCEP, the faster we can compete more fully for trade, investment and jobs. All businesses in all countries are racing to recover. No one is waiting for us,” he said.

European Chamber of Commerce of the Philippines (ECCP) President Lars Wittig said in a Viber message the group continues to support RCEP.

“RCEP membership will yield significant economic benefits for the Philippines and will help accelerate recovery from the mounting debt as well as the adverse economic impacts inflicted by the ongoing COVID pandemic. As such, we urge the incoming legislators to approve the RCEP agreement upon its return to session later this year,” he said.

Meanwhile, Federation of Free Farmers (FFF) National Manager Raul Q. Montemayor said in a statement the Marcos administration should consult with agriculture stakeholders on how they can prepare for the RCEP and take advantage of export opportunities.

“Our sector’s opposition to RCEP is largely due to the mishandling of the issue by the Department of Agriculture (DA)… The DA never acknowledged RCEP’s threats to the sector, despite data showing that our farmers were unprepared and our trade deficits were increasing by billions of dollars every year,” he said.   

“Our farmers and fishers do not wish to remain poor and unproductive and merely rely on government protection to survive,” he said. “They want to increase their yields and lower their production costs so that they can be profitable and competitive, even under trade agreements like RCEP. But they expect the government to be firmly behind them and not just stand idly by, or worse, work against them.”  — with inputs from Alyssa Nicole O. Tan

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