PH service sector seen winner in ASEAN 2015
Business executives yesterday said the Philippines will be a clear winner in the services sector under a fully liberalized ASEAN economy, but also warned that the country’s poor infrastructure development could drag down growth and a possible political backlash coming from the misplaced agricultural sector.
Ysmael Baysa, chief finance officer of Asia’s biggest fast food chain Jollibee Foods Corp., said at the annual Economic Journalists Association of the Philippines-ING Forum in Makati that the clear winner for the Philippines is the services sector especially those highly skilled and middle managers.
According to Baysa, the young educated Filipinos are going to see a steep rise in their salaries in the next five years as there would be strong demand for their skills locally and abroad. This also means easier flow of people for Jollibee for its regional operations as Baysa noted that they have difficulty getting working visas for Filipinos to be assigned in other Asean countries.
This would also translate to lower inflation, lower food prices because of zero tariffs on imported goods from the region.
But the losers, he said, would be probably the agriculture sector like the rice farmers because they are not competitive.
“This we have to address seriously,” he said stressing that the affected farmers from the provinces could trigger some kind of a political backlash.
“So we have to provide the much needed infrastructure in the provinces like rice mills, road networks, and technology,” he said noting that by improving the lot of the farmers, only then inclusive growth can be achieved. .
Bringing this scenario into to the Asean perspective, Baysa stressed that the political situation in Thailand is an internal thing but it is reminder of a political backlash from a disgruntled sector.
“What if more Thais are losing jobs because the Pinoys get their jobs, look at what happened in Singapore where there are more Pinoy workers and yet we’re not yet 2015,” he said. He described the situation in the EU integration where Greece, Spain and Portugal end up as losers as a reminder of a regional bloc under challenge.
“Look at what happened to that oil rig of China in Vietnam. That scenario is very probable. Do we have the political maturity to deal with that because that could derail or slowed the integration in some sectors in the region,” he said.
Bach Johann Sebastian, senior vice-president of JG Summit Holdings, said that Philippines and Filipinos are going to excel in the services sector.
“Filipinos can work anywhere and that is a real competitive advantage. Anywhere in Asean you can find Filipinos in leadership positions,” he said.
But Sebastian raised a concern on the country’s poor infrastructure development, especially in the area of energy stressing that infrastructure will spell the difference on how Asean countries can fully benefit from the economic integration, which aims to make Asean a single production base where there is a free flow of people, goods, and capital.
“I think these varying degrees of infrastructure developments in Asean will spell the difference because investors will look at operating in a place where infrastructure is not a constraint,” he stressed.
He said that infrastructure projects are crucial to the Philippines because the services sector, which is the Philippines edge, relies heavily on good infrastructure.
The problem, he said, is that infrastructure development cannot be done directly by the private sector but can be done only by working with the government, but working with the government is like “puling all of your teeth.”
JG Summit, he said, has been looking at the infrastructure projects of the government but it may end up there just looking noting that accessing these projects can be very difficult citing the case of the country’s international airport wherein discussions have been going on for like “forever”.