Asean competition to spur transparency
Intense competition will push the Philippine government to adopt best practices in the region.
Finance Department chief economist Gil Beltran said the best rules and practices will emerge and those behind Asean benchmarks will persevere to catch up with the regional convergence.
“Economies will eventually be compared with each other and those lagging behind will be encouraged to adopt best practices,” he said. “The principles of open, transparent, accountable governance will prevail.”
Beltran believes most countries will opt to adopt the good governance model of Asia, which is Singapore.
“Singapore is the model of good governance and is the most affluent country in Asean. Eventually, its sheen will rub off on its neighbors,” he said.
Beltran said the integration would also improve the monitoring of the Bureau of Customs, under pressure to adopt the international standards of port policing.
“Tracking smuggling is unaffected by Asean integration. Asean integration harmonizes customs rules and procedures and removes tariffs. If at all, it makes the task of customs officials easier,” he said.
“VAT will still have to be paid though and imports will still undergo inspection and be subject to tax payment,” Beltran added.
He said the integration would help industries to be more competitive and result in better and more polished product creation.
“Industries most positively affected are those which are competitive and which long ago adjusted to the removal of protection,” he said.
“These include industry and services, Industries negatively affected are those which remain uncompetitive and are in existence only because of tariff and non-tariff protection. These include agricultural products like rice and 15 agricultural products that still enjoy protection,” Beltran said.
The improved competitiveness will open opportunities for the Philippines in terms of foreign direct investments.
“The bigger Asean market encourages FDIs [foreign direct investments] in the most competitive Asean countries,” he said.
Beltran noted that the Philippines is very competitive in many sectors, especially manufacturing.
“We export electronics parts to Singapore and Malaysia, tobacco to Thailand and wheat flour to Indonesia, for example. Our industries are expected to take advantage of the opportunity of the bigger market and transparent procedures,” he said.
Allowing freer markets to work will always result in increased trade and more efficient players, Beltran said.
He said the integration would help push the economy to grow faster at a more stable level.
“We expect the Philippine economy to grow more rapidly as a result of integration,” he said.
The Philippine economy has been growing at an average of 6.4 percent in the last three years, the Philippine Statistics Authority said.
Beltran said both government and personal consumption, which have been driving the local economy in the past four years, have grown continuously.
Personal consumption rose 3.4 percent in 2010 to 5.6 percent in 2013, while government consumption expanded from 4.0 percent to 8.6 percent.
Senator Benigno Aquino IV noted that the Philippine economy has a sturdy base and does not need to fear the integration.
Data from the PSA showed prices are more stable now as inflation slowed down to an average of 2.8 percent in the past four years.
In terms of income, the Philippines was among the fastest in the region, ranked second with an average growth of 7.2 percent.
“We are afraid that the goods from other countries will flood our markets, but what we don’t see is that other countries are also afraid of our products because of their quality,” Aquino said.
Aquino, one of the founders of a non-government organization that helps small and medium enterprise to flourish, cited Kenneth Cabonpue, a furniture designer, as one of the most internationally successful entrepreneurs.