The National Economic and Development Authority (NEDA), the country’s macro-economic policy planning agency, stressed that the Philippines has no choice but to ratify the Regional Comprehensive Economic Partnership (RCEP), while big businesses believe on the need to expose domestic industries to more competition from foreign players.

In a briefing, NEDA Secretary Arsenio M. Balisacan warned that non-ratification of the treaty would make the country the least attractive destination to foreign investors and the country’s future depends on its ability to attract investors, particularly foreigners, as domestic capital is no longer enough.

“It must be ratified. It must be ratified... We need a lot of investments,” Balisacan told reporters on Tuesday, Feb. 21. “There's only so much that you can generate locally, internally.”

Balisacan said the Philippines will be left out should the Senate fails to ratify RCEP, a free trade agreement among the Asia-Pacific nations.

“As I said, we have incurred so much debt during the pandemic. We have very little fiscal space,” the NEDA chief said. “The only way we can grow and maintain our growth at the rate we experienced last year is to get investments, players that can put (and) build infrastructure for us, build plants and equipment for us, so that jobs can be created,” he added.

Meantime, Makati Business Club (MBC) urges the members of the Senate to ratify RCEP they are currently deliberating on to help businesses expand abroad, strengthen th e economy and accelerae job creation.

“We believe joining RCEP is essential to this as it will comprise 15 countries, 2.1 billion people, and around 30 percent of global GDP,” said MBC in a statement Tuesday, Feb. 21.

MBC believes that while RCEP would help us enter foreign markets, expose domestic industries to more competition at home. “We recognize that there are valid concerns about this. However, we believe that adequate safeguards have been included. We also believe competition will result in better local players and better products and services for Filipinos,” said MBC.

Balisacan added that the Philippines is not the only country jostling for a share of foreign investments, “our neighbors, Indonesia, Vietnam, Thailand, they're all aggressively looking for the same investors.”

“If you don't shape up, keep our investment climate, keep our rules of the game clearer so that they are attracted to come in, then they will simply go to these other countries and you will be left out,” he said. “And as an economist, without those... massive investments you can’t expect to generate high quality jobs. That's plain and simple,” he added.

Last Monday, Balisacan said RCEP would further enhance the country’s market access, thus the NEDA remains steadfast in its support toward the urgent ratification of the agreement.

Balisacan explained that several consultations with concerned stakeholders and studies on the subject affirmed that joining RCEP would unlikely lead to a surge in agricultural imports.

“The very low productivity of agriculture has nothing to do with RCEP. In fact, my view is that by adopting RCEP, that will be even more forced to pay attention to agriculture because only then you can fully maximize the benefits the RCEP,” Balisacan said.

“The current problem of agriculture has nothing to do with RCEP these are the problems where were outcomes of (our) past neglects of the sector. We didn't nurture the sector for so many decades,” he added.

Based on the 2021 trade data from the International Trade Center, under the RCEP, only 15 agricultural commodity groups corresponding to 33 tariff lines will have lower tariff rates compared to some ASEAN+1 FTAs.

This is equivalent to only 1.9 percent of the total 1,718 agricultural lines and only 0.8 percent of the total agricultural imports. Of these 33 tariff lines, 17 are raw materials, 8 are intermediate products, while only 8 are final goods.

The remaining agricultural tariff lines will have equal or higher rates compared to other ASEAN+1 FTAs, or are excluded from import tariff concessions under the RCEP.

The Philippines is currently exporting a number of products for which concessions were secured and securing better market access for these products through RCEP opens the possibility to further widen the market base in these countries.