Senate pressed to frontload RCEP OK when sessions resume May 23

THE Department of Trade and Industry (DTI) is hoping that senators will tackle and ratify the Regional Comprehensive Economic Partnership (RCEP) when the Senate reconvenes on May 23.

“Hoping that it will be given due consideration… because not only that this is a very important milestone that we laid for Asean, it is also a very important and critical agreement for the Philippines,” DTI Assistant Secretary Allan Gepty said during the Economic Journalists Association of the Philippines (EJAP) webinar on Wednesday.

Gepty emphasized that the DTI currently focuses on fast tracking the ratification of RCEP agreement, as he stressed that the Philippines “could not afford not to join RCEP.”

The trade assistant secretary also cited some of the specific benefits of joining RCEP, which are improved trade balance, increased welfare and lower poverty incidence.

In fact, Gepty noted, that by 2031, poverty incidence will decrease by 3.62 percent and real GDP (gross domestic product) will increase by 1.93 percent.

According to Gepty, there are also sectors with notable improvement in exports. These are electronic equipment and machinery equipment in non-agriculture. He noted further that the construction industry may also benefit from RCEP due to expected inflow from investments.

Gepty also cautioned that it would be detrimental for the Philippine economy to shun participation in RCEP, saying trade investments and other opportunities may be diverted to other economies.

As for the effect of non-participation in RCEP on GDP, Gepty noted that according to Philippine Institute for Development Studies (PIDS) research fellow Dr. Francis Mark A. Quimba, there will be a decline in GDP by as much as -.26 percent.

The trade assistant secretary also pointed out that Free Trade Agreements (FTAS) basically provides preferential market access and sets standard rules and disciplines so that the conduct of business and trade will be stable, predictable, and conducive in a free trade area.

As the Philippines transitions to the new administration, Gepty noted that the international reputation of presidential frontrunner Ferdinand “Bongbong” Marcos Jr.’s family won’t necessarily affect the country’s ongoing trade relations with some of the country’s key partners.

He emphasized that a free-trade agreement is a national agreement, which has standard rules and disciplines in doing business, trade and investment, regardless of changes in administration.

“So take note that free-trade agreement is a national agreement so regardless of the government, administration, etc., the fact remains that we are working under a rulesbased system,” Gepty stressed.

“So when there are changes in administration, they know that the direction will still be consistent,” he added.

For his part, Agriculture Secretary William Dar, expressed his support for the accession of the Philippines to the regional economic deal.

“Ang aking additional comment in relation to that, bakit may mga farmers groups or CSOS [civil society organizations] na ayaw mag-accede dun sa RCEP kasi may experience na…sila dito sa ating bansa na ’yung may mga safety nets na dapat ilagay ng gobyerno in relation to our accession to WTO

ay di po naipatupad lahat,” Dar said at the EJAP webinar on Wednesday.

“So ganun din po ang aking sasabihin na dapat para may mga strong support sa mga farmer associations tsaka sa CSOS dapat may commitment at ipapatupad ng gobyerno ’yung mga safety nets para magiging mas competitive ang ating mga farmers that’s why kami ay we are advocating for a bigger budget for the agriculture sector para mapunuan ’yung mga kakulangan na dapat mas maging competitive sila kagaya mga post-harvest facilities, cold storages warehouses, marami po ang kakulangan natin pa,” he added.

For his part, PIDS senior research fellow Dr. Roehlano M. Briones, emphasized that the new administration should prioritize the regional economic deal.

“For the new administration, pushing subject matter of Gepty, ’yung acceding to RCEP items that incoming president Marcos Jr. should be focusing on, especially the transformation agenda,” Briones said.

RCEP is a free-trade agreement pact among Asean countries and their trading partners including Australia, China, Japan, New Zealand and South Korea. This represents 30 percent of the global gross domestic product (GDP) or $26.2 trillion.

It entered into force on January 1,2022.

The trade department has been lobbying for the ratification of RCEP as it is seen to “help restore business confidence and encourage more economic activities, particularly MSMES [micro, small and medium enterprises], investors, service providers and professionals.”