PH readies goods sector for ASEAN integration
MANILA – A number of industries in the goods sector have started realigning road maps and plans for improvement, in preparation for the Association of Southeast Asian Nations (ASEAN) integration in 2015, officials said during the ASEAN Economic Community Forum held last week.
Adrian Cristobal, chairman of the Committee on ASEAN Economic Community (CAEC) and trade and industry undersecretary for industry development and trade policy group, said that it's a good sign that the sugar and livestock industries are already drafting plans to be able to compete with companies in the region.
“I think the good news is that these sectors — sugar [and] livestock, are not asking for an extension [nor are] complaining, but they’re actually drafting their plans [and] roadmaps in order to be able to compete within the region," he said.
He said that the DTI Regional Operations group in particular have been having talks with the livestock sector on setting a new direction with its operations.
“The DTI Regional Operations group has been cooperating and working with the livestock sector…they, too, have come up or [are] developing their roadmap for competitiveness.”
Cielito Habito, chief of USAID’s Trade-Related Technical Assistance for Development (TRADE), said that the sector’s biggest investment in the past year came from the sugar industry.
Investments in sugar milling equipment grew by 300% in 2013, a sign that the sugar industry is preparing for the drop to 5% on duties by 2015.
A big part of this increase can be attributed to Central Azucarera Don Pedro, Inc. (CADPI), the Batangas-based refinery that upgraded its equipment last year.
“Looking at the latest data of the national income accounts, the biggest growing investment in durable equipment in the past year in 2013 was sugar milling equipment…it grew by more than 300% in investments.”
“It suggests to me that the sugar industry is already gearing up… pinaghahandaan na nila ang pagbaba sa five percent (ang tariff).”
INTRA-INDUSTRY TRADING IN ASEAN REGION
Trade and Industry Secretary Gregory Domingo said that part of the challenge is having agricultural products that neighboring ASEAN countries also produce.
He said that although this is the case, it should be posed as an opportunity not just for the Philippines but also for countries in the region.
“May goods tayo like agricultural products na …we produce [and] they produce rin… So from an agricultural product perspective, medyo limited yung range nung product”
“So ang tingin ko, ang talagang opportunity is not only for us but for everybody else in the region, dahil a big part of the industry is [having] global supply chains.”
Habito said that the countries in the ASEAN region have been practicing intra-industry trading for quite some time now, trading goods from the same industries.
Top import and export partners of the Philippines in the ASEAN region have been Thailand, Singapore, and Malaysia.
“If we look at our trade with ASEAN, particularly our three biggest trading partners in the ASEAN, we will notice that… [most goods are] from the same industries – again, what we call intra-industry trade.”
He said that products or goods mostly involved in intra-industry trading are electronics, motor vehicles, and chemicals.
According to Habito, the country’s approach in its trade relationships within the ASEAN should be complementary rather than competitive.
He added that imposing trade protection rules or laws could be self-penalizing, if executed.
“The trade relationships in the ASEAN are increasingly complementary rather than competitive…Trade protection, if we impose it, can actually be self-penalizing.”