Outlook mixed for PH in ASEAN 2015
Government and private sector leaders are mixed when it comes down to the question of whether or not the Philippines is ready to participate in the ASEAN Economic Community (AEC), of which the regional integration will start next year.
In one of the sessions presented by the World Economic Forum (WEF) on East Asia yesterday in Manila, the specific theme of “Philippines: The next Asian miracle” was tackled and while the general consensus is that the future is indeed bright economic-wise, the panelists which included Philippine Long Distance Telephone Co. chair Manuel V. Pangilinan are cautious on the country’s long-term viability, in particular on reforms and political will, and how to go about linking economies within the trade bloc.
“The soft part of development is important and perception of the Philippines is improving,” remarked Pangilinan. “But at the end of each year, where is the profits?”
“We’re mainly a consumption driven economy and it’s time to switch that to an investment-driven economy,” Pangilinan added. He again stressed the need for infrastructure development and his comments on the Aquino government’s public-private partnership (PPP) programs are optimistic. “All of the PPP projects are commendable (but) I think we just need to get on with it.”
When asked if the country is prepared to initiate the process of market and financial integration next year, the Filipino business tycoon admitted to a bit of vagueness when it comes to the ASEAN plan.
“It’s always been a mystery to me. If you translate it to particulars, what does it really mean?” But then he took note of the strengths of the local industries and while manufacturing is not yet there, there are promising growth sectors.
“When you talk inclusive growth — that’s agriculture and tourism or services industries … so lets focus on those first,” Pangilinan said.
Tourism secretary Ramon R. Jimenez Jr. for his part thinks the Philippines is ready for ASEAN integration. “We will be,” he said, and then later added more firmly, “yes we are (ready).”
There are a lot of infrastructure development required to fully launch the tourism industry, especially airport development since more than 99 percent of tourists in the country arrive by air. “In Asia, we’re right smack in the middle of everything (so) you have a fairly good idea of our (part) in the (regional) integration.”
Karim Raslan, CEO of the KRA Group in Malaysia, said it is the smaller countries such as the Philippines that will benefit in ASEAN integration, since the larger economies by comparison including Malaysia, Thailand, and Singapore are already saturated. Foreign investors will be looking towards the Philippines to pour in money.
“It’s about confidence in investing in the human resources here,” said Raslan. “(Philippines) has a huge advantage in English and you’ll find more and more Filipinos (based overseas) going back here.”
Cherrie Atilano, another local panelist and co-founder of Gawad Kalinga Enchanted Farm, is concerned that the Philippines is not truly prepared for ASEAN integration, however Kevin Lu of INSEAD Singapore, also a WEF Young Global Leader, said the Philippines should find ways to take advantage of the process of integration.
That takes vision and flexibility, said Lu. “The bigger question – when you talk about growth drivers – is you have other big economies (so) how will the Philippines position itself to benefit from the growth elsewhere? How do a much smaller country benefit from these growth?”
“In the agricultural perspective, we’re not yet ready for ASEAN integration,” said Atilano.
Jimenez opined: “I think it’s fair (to say) we’ve only just began, but we have a lot of housekeeping to do before we got to speed.” The tourism chief reiterated though that Philippines is the next Asian miracle.