Business community favors Phl joining TPP

Philippine Star | April 4, 2016

Leaders of the business sector said it would be a positive move for the Philippines to join the Trans-Pacific Partnership (TPP), since membership to this massive free trade agreement (FTA) would offer many opportunities for the economy.

Cirilo Noel, a member of the Makati Business Club’s board of trustees and chairman of SyCip Gorres Velayo & Co., said 41 percent of the Philippines’ total trade comes from TPP member countries, while two of the biggest foreign direct investors to the Philippines are also TPP members, namely, the US and Japan.

“There is still a great scope for us to deepen our investment relationships with big investing countries,” Noel said in his speech at a recent conference in Makati City on TPP opportunities and challenges. “If we don’t become part of the TPP, we may lose our big trade and investment partners,” Noel said.

He also said the Philippines is expected to benefit from the TPP in terms of a significant increase in exports.

However, Noel also mentioned challenges ahead, and this would require the government to make adjustments to the domestic policy environment, to provide assistance to vulnerable sectors of industry, and to introduce programs that would enhance the capacities and provide safety nets to enable Philippine businesses to compete on a larger scale.

“Similarly, the MBC believes that we should develop international capacities that would allow us to meet the TPP obligations,” including improving the country’s ease of doing business.

He also suggested reviewing the Constitution, particularly the provision that restricts foreign ownership in the country.

George Barcelon, president of the Philippine Chamber of Commerce and Industry agreed that “TPP is needed” because, while the country has been doing well over the past several years, Philippine economic growth is mainly due to OFW remittances.

Barcelon said TPP would be an important factor in the Philippines’ efforts to attract more foreign direct investments that are needed to spur more businesses and create more job opportunities.

Through participation in this partnership, “we should be able to help SMEs grow their business,” he continued.

But Barcelon, like Noel, said the Philippines must first do its homework before making any decision.

Barcelon said the Philippines must first assess its readiness to be part of the FTA, gauge its competitiveness against other member countries, some of which enjoy government support in the form of subsidies, and weigh the benefits against the risk of compromising the national interest.

While joining the TPP could help the country sustain progressive and inclusive growth through a predictable economic climate, “we want to have the best interest of our local businessmen at heart and we want to join TPP to our advantage. We hope that if do we join TPP, it will be towards Philippine prosperity,” Barcelon said.

On Feb. 4, 2016, the formal agreement to establish the TPP was signed by 12 countries — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.

The TPP groups these nations in a regional trading bloc spanning both sides of the Pacific Ocean. Together, members boast a combined population of 800 million, and are projected to account for 40 percent of the world’s gross domestic product and 30 percent of world trade.

Source: www.digitaledition.philstar.com