“BETTER late than never” is how one Filipino business consultant opined upon reading that the Philippine Senate finally ratified the Regional Comprehensive Economic Partnership (RCEP), an economic pact that brings together the 10-members of the ASEAN and their neighbors such as South Korea, Japan, New Zealand and China. The RCEP covers 30 percent of the world’s gross domestic product (GDP), trade volume and population.
The approval came last February 21, 2023, where our senators deliberated until evening with the result that the majority, 20 senators, voted in its favor, one abstained and one dissented.
One of the most contested issues in Philippine politics was finally resolved after dissenting voices from the country’s farm sectors were finally overcome by the advocates of expanding regional and global trade and investments.
Our farm sector was justified in its fear of being left behind (again) in the push towards greater trade liberalization with the Asia-Pacific region’s major economies and global economic powerhouse China, raising its perennial concern over the government’s dereliction of its duties to provide support and infrastructure facilities to our farming sector and thus ensure their survival and viability.
The Philippine economy would be indeed left far behind in countless sectors, from the already indispensable and diversifying fruit exports to the China market, to potential industrial and supply-chain offshoring of global economic dynamo China and the other East Asian industrial giants for lower labor cost, tax breaks and other advantages in the ASEAN countries.
But even in the industrial and manufacturing sectors the Philippines also face tremendous challenges to be competitive with the attractions offered by fellow ASEAN countries.
The archipelagic country has the natural disadvantage of the shipping distance from the continental markets and compounded by lagging and expensive privatized domestic transportation infrastructure.
One seemingly intractable obstacle to foreign industrial and manufacturing investment allure for the Philippine the past thirty years is its “most expensive” power rates in ASEAN, next only to Japan in Asia. Potential investors would have to factor in the cost of our electricity—3X higher than China, double that of Vietnam and 30 percent higher than Thailand.
This factor alone weighs heavily on the Philippines’ competitiveness within the RCEP system, but there’s no question that the advantages outweigh the challenges as the Philippines need to overcome the shortcomings for its own benefit, whatever its situation.
With the Philippines ratification of the RCEP, it now signals country’s readiness to rise to the challenge.
Cooperation with China is a vital consideration for the Philippines to be effective in its bid for progress and prosperity within the RCEP framework. China and its cooperation, assistance, financial support and investments are crucial in the Philippines’ drive to overcome the deficits in basic utilities and infrastructures.
Although China is already assisting us in most of our needs, more is needed.
China and the Philippines’ strategic cooperation had been solidified under the leadership of President Rodrigo R. Duterte (2016-2022) in the latter part of his term, boosting Philippine preparedness tremendously. The present administration of Pres. Ferdinand Marcos Jr. is not being as robust in its focus on the economy and dilutes it with inconsistent, displeasing security dalliances which we hope is a temporary aberration.
The signs are, however, good that the current administration in the Philippines will be finding its balance again, with this ratification of the RCEP as the Philippines’ clear signal of positive things to come on its regional relations front which the nation supports with an overwhelming majority, as expressed by the votes in the Senate.
The hopes for economic recovery and prosperity are the positive driving force behind this.
The country’s economic team pressed hard for ratification of the agreement, the secretary of the National Economic and Development Authority, said the ratification of RCEP was vital to the country’s future describing the ratification as a “bold and game-changing move (that RCEP would provide) … another engine for growing the economy and making it part of a rapidly rising Asia.”
RCEP is the major and historic step towards regional economic integration for greater efficiency and synergy of the regional economy at this point, and now with the full participation of all the key economies in the region will serve as a buffer against the onslaught of disruptive pressures from the powers of the West seeking to distract Asia from its positive momentum.
Regional economic integration will fortify Asia and its surrounding Pacific cooperating nations as a bastion of economic security and prosperity to enable the region to share its success and bounties after the West settles down from its current turmoil and dysfunction.
Asia’s economic strength and political stability will help restore the world when the dust and din of conflicts subside.
The Philippines is the last cog in the wheel of the churning machinery of the Asian Century, now that it is in place, we can expect the era of “Forever Peace and Prosperity” to gain impetus and create the “Community of Shared Future for Mankind” ending the past 500-years of “Forever Wars” once and for all.