The Regional Comprehensive Economic Partnership (RCEP) agreement entered into force today, paving the way for lower import taxes for goods from at least 14 other countries, a move that the government expects will lower prices for consumers and attract more foreign investments into the country.
The government touted the practical benefits of the RCEP as early as the previous administration, saying that it will mean lower costs of key materials for the local manufacturing sector.
Billed as one of the largest free trade agreements to date, it covers 50.4 percent of the Philippines’ export markets, 67.3 percent of the country’s import sources, and 58 percent of the foreign direct investments that came here.
RCEP includes the 10 members of the Association of Southeast Asian Nations along with China, Japan, South Korea, New Zealand, and Australia.
Trade Secretary Alfredo Pascual cited increased market access for local exporters as a significant benefit, adding that this industry has the potential to expand by another $27.8 billion—almost 4 percent of the $784 billion in Philippine exports in 2022.
Pascual also noted the increased investments the RCEP is expected to bring, citing how this was vital to the Philippine economy.
“This regional pact will open a wide range of market opportunities for investors, particularly in export-oriented enterprises, in this era when the center of economic activities is in the region,” Pascual said in a statement in early February.
The regional trade pact was ratified by the Senate last February, completing the Philippines’ accession to the agreement, following the commitment made by former President Rodrigo Duterte in September of last year.
The Joint Foreign Chamber of the Philippines (JFC), a coalition of the American, Australian-New Zealand, Canadian, European, Japanese, and Korean chambers of commerce, had backed the Philippines’ decision to join, seeing the benefits it will bring.
“The Philippines’ inclusion in the bloc further expands the network of foreign markets accessible to Philippine exports. It reinforces the decision of many of our members to invest in the Philippines and will attract more investment from our home countries,” JFC said back in February.
Other local business groups that include the Philippine Chamber of Commerce and Industry, the Management Association of the Philippines, the Confederation of Wearables Exporters of the Philippines, and the Foreign Buyers Association of the Philippines have also expressed broad support for the RCEP.
Several agricultural and farmers groups, however, have opposed the Philippines’ move to participate in the RCEP, fearing an influx of cheaper agricultural products in the country which might kill local industries that are unable to compete with imports.
These groups include the United Broiler Raisers Association, the Katipunan ng Bagong Pilipinas, the Pambansang Koalisyon ng Kababaihan sa Kanayunan, the Federation of Free Farmers, the Freedom from Debt Coalition and the Samahang Industriya ng Agrikultura.
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