MANILA, Philippines – Philippine conglomerates are ready for a single Association of Southeast Asian Nations (ASEAN) economy by end-2015, but executives concede the agricultural sector will have a tough time dealing with the changes.
Jollibee Foods Corporation chief financial officer Ysmael Baysa said Wednesday, August 6, that there will be winners and losers when the ASEAN Economic Community (AEC) kicks in.
Lower prices of goods would benefit consumers but could harm certain sectors such as farmers and entrepreneurs. (READ: 'Agri, SME sectors not ready for ASEAN integration')
"Among the losers is agriculture. If sugar and rice from Indonesia is cheaper and sold in the Philippines, [local] farmers would suffer. This is something that should be addressed seriously because these are the sources of social unrest," Baysa said.
Under an integrated ASEAN Economic Community, the region will be transformed into "a single market and production base, a highly competitive region, a region of equitable economic development, and a region fully integrated into the global economy.” (READ: A united region: The ASEAN Community in 2015)
Some say this is a double-edged sword for the Philippines, given the need to put in place institutional reforms that will make Philippine business and sectors competitive in the regional economy.
Free trade agreements
"Foreign investors operating in the Philippines are also able to benefit from the AEC and these FTAs," the American Chamber of Commerce of the Philippines (Amcham) said in a letter to the House committee on economic affairs.
Amcham said the population of the AEC economies exceeds 625 million and with the addition of Australia, China, India, Korea, Japan, and New Zealand, the total population of potential customers is over 3 billion.
Amcham added that free trade with these economies gives Philippine exporters unprecedented access to extremely large markets but also increases the exposure of domestic Philippine markets to imported products.
“The Philippines has new opportunities to provide large quantities of food and manufactured products, as well as services, to new consumers with rising incomes. On the other hand, the survival of domestic firms may be challenged by inexpensive imported products and regional service providers," the group said.
Amcham also commended the Department of Trade and Industry for the roadmaps they are conducting for nearly 50 industries - including 7 for agribusiness - in which export potential is evaluated and needed
reforms and incentives are identified.
"These roadmaps, when implemented will prepare these sectors better to take advantage of the opportunities of new FTAs," Amcham said. – Rappler.com