Finance Secretary Benjamin Diokno, along with other top officials from the executive branch, attended the plenary session on February 15, 2023 sponsoring Senate Resolution No. 485 concurring the ratification of the Regional Comprehensive Economic Partnership (RCEP) Agreement.
Senate President Juan Miguel Zubiri shared that the Senate is looking to ratify the agreement by next week.
The RCEP is the largest regional free trade agreement (FTA) in the world, accounting for about a third of the world’s gross domestic product (GDP), with signatories from the ten member states of the ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam), the ASEAN Plus Three countries (China, Japan, and South Korea), and ASEAN Plus Six members (Australia and New Zealand).
The RCEP, coupled with the Philippines’ economic liberalization bills, will result in accelerated economic recovery and increased investor confidence, thereby attracting more foreign direct investments (FDIs) into the country, which in turn will generate jobs for Filipinos.
The manufacturing and exports sector will also be given a wider area for sourcing raw materials, one set of Rules of Origin (ROO) to access 14 FTA partners, and more trade enhancing procedures.
Micro, small and medium enterprises (MSMEs) will also be supported through its integration into the global value chain.
In his sponsorship speech, Senate President Zubiri assured the public that the RCEP will not harm the agriculture sector and will not include highly sensitive agricultural products.
Under the RCEP, the Philippines will only liberalize 33 agricultural tariff lines, and only Australia, China, New Zealand, and South Korea will benefit from the reduced agricultural tariffs.
He further clarified that only 15 agricultural products, most of which are not produced in the Philippines, are the only ones included in the 33 tariff lines.
These include live swine and chicken, frozen mackerel, fish fillet––dried, salted or in brine, but not smoked, fresh or chilled olives, celery, and spinach, some provisionally preserved vegetables but not for immediate consumption, black pepper, corn starch, palm nuts and kernels, olive oil, other than re-esterified and hydrogenated in flakes, sausages, and feeds for primates.
The 33 agricultural tariff lines are equivalent to 1.9 percent of the total 7,564 agricultural tariff lines and only make up 0.8 percent of the total import value.
Meanwhile, trade remedies, which are tools that allow governments to take action against imports that harm the domestic industry, will be implemented under the RCEP.
Having been a member of the World Trade Organization (WTO) since 1995, the safeguards or trade remedies enjoyed by the Philippines will remain intact under the RCEP.
The RCEP will also introduce additional trade remedies, such as modification of commitment that can be done if the country becomes adversely affected by the implementation of the agreement.
Senator Loren Legarda also lent her support for the ratification of the RCEP, saying, “An open, transparent, and predictable trade and investment environment generates new opportunities for everyone. RCEP […] will help our economic sectors push their performance. This will hopefully benefit our consumers.”
In a study by the Asian Development Bank (ADB), the RCEP could increase the Philippines’ income by 0.4 percent, adding US$3 billion to 2030 income. lt could also help increase the country’s exports by 3.7 percent, which adds US$7 billion to 2030 exports.
“[The RCEP] is an opportunity and a bridge towards a better connected economic region where the Philippines can establish itself as a major economic force,” said Senate President Zubiri.
###