By Revin Mikhael D. Ochave, Reporter
THE Philippine economy may expand at a slower pace if it fails to become a member of the world’s largest trade bloc, the Joint Foreign Chambers in the Philippines (JFC) said, as it once again urged the Senate to ratify the Regional Comprehensive Economic Partnership (RCEP) trade deal before session adjourns next week.
“Studies show the Philippine economy will grow at a slower pace without membership in RCEP. Nobody wants this to happen… we appeal to you (the Senate) to vote to approve the RCEP agreement when you return to session this week,” the JFC said in a statement on Monday.
Senators on Monday resumed the third and last regular session of the 18th Congress. However, time appears to be running out for the Senate to ratify the RCEP as the session ends on June 3.
Sought for comment, Senator Aquilino Martin L. Pimentel III, who heads the Foreign Affairs Committee, said in a Viber message that RCEP will be on the agenda for the May 30 session.
Mr. Pimentel said he is still hoping that RCEP will be ratified before Senate adjourns.
“That’s my hope. And I am working on it. (RCEP) should have been (discussed) today but (was) moved to May 30 by the leadership. Let us see. I am for RCEP ratification,” he said.
Senate President Vicente C. Sotto III said the senators will “not blindly vote on any measure.”
Asked if it will be hard to ratify the RCEP with the remaining time, he replied: “It depends on how the interpellations evolve.”
The JFC said the Philippines cannot afford not to participate in the RCEP, which it described as the largest trade bloc in the world representing 30% of global GDP.
“The Philippines cannot afford to leave itself out of the bloc since being a member will bring economic benefits that will hasten recovery from the scars, higher debt, and other damage caused by the ongoing COVID-19 pandemic,” it said.
The Philippine economy grew by 8.3% in the first quarter. The government is targeting 7-9% gross domestic product (GDP) growth for the full year.
The JFC said RCEP’s ratification will expand the network of foreign markets already accessible to Philippine exports.
“When this happens a large number of our current investors will invest more, and new investors from Australia, Europe, New Zealand, North America, and Northeast Asia, will be attracted, creating many thousands of new jobs. RCEP also offers other new advantages for exporters located in the Philippines that will benefit our member companies,” it added.
The JFC statement was approved by the American Chamber of Commerce of the Philippines, Australian-New Zealand Chamber of Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines, Inc., Korean Chamber of Commerce of the Philippines, Inc., and Philippine Association of Multinational Companies Regional Headquarters.
RCEP took effect on Jan. 1, and is already in force in Australia, Brunei, Cambodia, China, Japan, Korea, Laos, New Zealand, Singapore, Thailand, and Vietnam.
The Philippines is still not a participant in the RCEP as the Senate was unable to give its concurrence before session was adjourned on Feb. 3 for the election break. President Rodrigo R. Duterte ratified the trade deal on Sept. 2 last year.
“If we don’t participate, there would be the reverse of the benefits. So, instead of the positive gains on gross domestic product like 1.98% (growth), investments, exports, employment, and poverty level could be the reverse or worse,” Trade Secretary Ramon M. Lopez said in a mobile phone message.
If the Philippines fails to join, potential investments may be diverted to RCEP members, he added.
“We should join now. If we don’t join, the investments to increase production will be affected. The investors will go to other countries. That can be an additional input to our production capacity and cut our trade deficit. That is how you address the trade deficit, by having capacity locally so that we can export,” Mr. Lopez said.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the delay in the country’s participation in RCEP will result in lost opportunities for foreign direct investments (FDIs), imports and exports.
“A foregone opportunity is the potential increase in FDIs to locate in the country as a production/manufacturing and marketing base, especially FDIs of global/multinational companies that are attracted to locate in a RCEP member country in order to also access the bigger export markets of other RCEP member countries as well, as part of managing and hedging their respective global/regional supply chains,” Mr. Ricafort said in a Viber message.
Bank of the Philippine Islands (BPI) Chief Economist Emilio S. Neri, Jr. said in a Viber message that the Philippines may face more supply issues if it does not join RCEP.
“The Philippines will miss out a lot if it fails to join RCEP. The country may suffer from food supply and other supply chain-related challenges that can worsen combined inflation and economic stagnation resulting from the armed conflict in Eastern Europe and the persistent global supply chain issues,” Mr. Neri said.
In case the Senate fails to act, the RCEP ratification may have to wait until the 19th Congress opens its first session on July 25.
RCEP has faced strong opposition from the local agriculture industry groups, saying that the sector is not ready for free trade in the global market.