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12 investment promotion agencies and 12 industry associations are urging the Senate to ratify the Regional Comprehensive Economic Partnership Agreement
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Joining RCEP will allow firms based in the country, particularly exporters, to benefit from the lowering of trade barriers
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It will also improve market access for goods and services
Calls from both the private and public sectors for the Senate to ratify the Regional Comprehensive Economic Partnership (RCEP) Agreement are swelling.
Investment promotion agencies (IPAs) and industry associations have backed calls for the Senate to ratify the RCEP, saying further delay in joining the world’s largest free trade area will result in the Philippines losing growth momentum.
Twelve IPAs and 12 business groups are urging the Senate’s immediate ratification of RCEP to allow local firms, particularly those geared towards exports, to benefit from lower trade barriers and improved market access for goods and services in other 14 export destinations, the Department of Trade and Industry (DTI) said in a statement.
Senate deliberations are ongoing for concurrence to the executive ratification signed by President Rodrigo Duterte on September 2, 2021.
Time is running short as Congress will go on a break on February 5 for the election period.
The industry groups and IPAs cautioned that further Senate delay will result in loss of growth momentum and cast doubts on the Philippines’ openness to trade and investment.
“The business community hopes that the Senate will immediately concur the ratification of RCEP. We definitely don’t want to be left behind in this area. This is something that we need to take advantage of to help in our much-needed economic growth and recovery,” Philippine Chamber of Commerce and Industry president George T. Barcelon said.
“The RCEP region remains to be a strong bastion of economic activities and opportunities as trade and investment shift to Asia. Thus, given the extent of economic activities in the region, the Philippines cannot afford to delay or not participate in this free trade deal when all our neighbors in Southeast Asia are reaping the advantages of the Agreement,” wrote Philippine Economic Zone Authority Director General Charito Plaza.
DTI said RCEP will strengthen domestic efforts to improve the business environment by complementing ongoing legislative reforms. These include the Corporate Recovery and Tax Incentives for Enterprises Act, enacted in March 2021; passage of amendments to the Retail Trade Liberalization Act in December 2021; and ongoing consolidation of the final amendments to the Public Service Act under the Bicameral Conference Committee.
“These together send a signal to the international community of the country’s continued commitment to provide a more conducive business environment, strengthen services sector niche, and create employment amidst the ongoing pandemic,” DTI stated.
The trade department noted that RCEP gives the assurance that the existing rules and disciplines in doing business in the country, including the allowed foreign equity participation (FEP) in various key sectors, will not be changed arbitrarily.
This is because RCEP outlines the legal regime in the conduct of services trade and investment through Schedules of Specific Commitments and Reservation Lists of Parties.
DTI said RCEP will help encourage inflow of foreign investments, facilitate an opportunity to partner and form joint ventures within the region, and allow greater participation of more service providers in vital sectors of the country.
These sectors include manufacturing, creative sectors, financial services, aerospace and shipbuilding sector, research and development, IT-BPO, professional services, education services, and energy.
The country under RCEP commits to promote collaboration between local universities and foreign higher education institutions, consistent with the Transnational Higher Education Act (Republic Act No. 11448) signed into law in August 2019. With RCEP, foreign higher education institutions are thus guaranteed of their investments.
Moreover, market access opportunities, greater openness, and increased certainty have been accorded under one framework agreement for Filipino businesses and skilled professionals across a number of sectors in other ASEAN member states, Australia, China, Japan, South Korea, and New Zealand.
These sectors are R&D services, construction and professional services (engineering and architecture), higher education services, banking services, and game development services, among others.
The RCEP was signed between the 10-member states of the Association of Southeast Asian Nations (ASEAN), including the Philippines, and its free trade agreement partners Australia, China, Japan, South Korea, and New Zealand on November 15, 2020.
On January 1, 2022, the agreement entered into force for 10 signatory states: Brunei Darussalam, Cambodia, Laos, Singapore, Thailand, Vietnam, Australia, China, Japan, and New Zealand.
The agreement will be implemented by South Korea on February 1, 2022 and by Malaysia on March 18, 2022.
