AEC-enabled PH enterprises key to inclusive growth


In order to make inclusive growth and sustainability a reality, the country needs to pursue a change in mindset that will enable businesses, particularly small, and medium enterprises (SMEs) for the regional and global markets,” said Former Director General of the National and Economic Development Authority (NEDA), and head of USAID’s Trade-Related Assistance for Development (TRADE) Project, Dr. Cielito Habito during the forum on “Industry Roadmaps and the AEC Game Plan: Roadmap Localization for Competitiveness” held on 6 August 2015 in Tagaytay City.


Dr. Habito joined Department of Trade and Industry (DTI) Assistant Secretary Rafaelita M. Aldaba in the roadmap localization forum to encourage stakeholders in Region 4 to localize industry roadmaps in view of wider markets opened by the ASEAN Economic Community (AEC) 2015, and the European Union’s Generalized Scheme of Preference Plus (EU GSP+). He spoke on the challenges and advantages of ASEAN Integration, clarified misconceptions and the need and ways for the Philippines to achieve inclusive growth.


“AEC is already here. At present, free trade has already been prevailing, as tariffs on 99.6% of all goods we trade with our ASEAN neighbors were already brought down to zero since 2010. Thus, there will be no ‘tsunami of ASEAN goods’ by 2016 as feared by some. Furthermore, the ASEAN Secretariat’s latest scorecard on the 400+ non-trade commitments under the AEC Blueprint already places the country’s compliance at more than 87%. December 31, 2015 is not ‘doomsday’, but merely a target date for 100% compliance,” clarified Dr. Habito. He stressed that the key instrument for inclusive growth is empowering and developing SMEs through government-wide coordinated support to expand financing options, increase access to technology, and improve market access.


Dr. Habito explained that SMEs, for their part, should strengthen and professionalize their financial and overall business management, and be prepared to cluster with other competitors when volume orders especially from overseas calls for it. He also said it is important for SMEs to study and utilize government programs designed to help them such as the Industry Roadmap Project (IRP) of BOI, which is designed to help them gear up for competition under the AEC. He went on to explain that the Philippines’ trade with other member countries in ASEAN is mostly in products in different stages of the value chain in the same industries, especially electronics, vehicles and chemicals. “This makes our TRADE with ASEAN more complementary rather than competitive in nature, and trade protectionism can be self-penalizing in this context,” he asserted.


Meanwhile, Aldaba explained that knowing these realities and the country’s current industrial policy will be crucial in determining how to address gaps and issues, position industries, craft, upgrade, and implement regional and national industry roadmaps.


Among the sectors who completed their roadmaps and is already moving forward in its implementation is the automotive industry — which is of special interest to Region 4 since it houses a number of manufacturing site for companies such as Toyota, Intel, Panasonic and Amkor. The roadmap, jointly crafted by the BOI and the private sector, resulted into the Comprehensive Automotive Resurgence Strategy (CARS) program is expected to jumpstart local industries and SMEs, the country’s automotive manufacturing industry and contribute in the efforts to achieve national competitiveness in the ASEAN region.


The forum was attended by representatives from industry associations, chambers of commerce business support organizations, local government units (LGUs) and agencies, and members of the academe as well as the media.