Leaders of the House of Representatives expressed their full support for the immediate ratification by the Senate of the Regional Comprehensive Economic Partnership (RCEP) agreement so that Filipinos can reap its benefits, including more jobs.
“By immediately ratifying the RCEP Agreement, the Philippines can sooner benefit and take advantage of this mega-trade deal that could attract more foreign investors, create more job opportunities, and curb the unemployment and poverty rates in the country,” said Speaker Martin G. Romualdez, one of the principal authors of House Resolution (HR) 728, which supports the Senate’s ratification of RCEP.
The National Economic and Development Authority (NEDA), meanwhile, reiterated its support for the RCEP agreement and urged its ratification.
“We, in NEDA, consider RCEP to be a vehicle that would drive our economy’s sustained growth through regional and global trade as well as through greater investment in strategic sectors. Being part of RCEP will further enhance our market access, placing us at par with other RCEP-participating countries and the world’s largest economies such as China, Japan, and Korea, among others,” NEDA Secretary Arsenio M. Balisacan said.
“Several consultations with concerned stakeholders and studies on the subject affirm that joining RCEP would unlikely lead to a surge in agricultural imports. In any case, with or without RCEP, the government strives for a competitive and resilient agriculture sector,” Balisacan added.
Joining Romualdez as authors of the measure were Majority Leader and Zamboanga City 2nd District Rep. Manuel Jose M. Dalipe, Senior Deputy Majority Leader and Ilocos Norte 1st District Rep. Ferdinand Alexander A. Marcos, and Batangas 5th District Rep. Mario Vittorio Mariño.
They noted that on Nov. 15, 2021, the Philippines signed the RCEP agreement, which covers trade areas for goods, services, and investments, sustainable growth, and business environment involving the 10 member states of the Association of Southeast Asian Nations and its five other free trade agreement (FTA) partners, namely Australia, China, Japan, New Zealand, and the Republic of Korea.
The House resolution said the RCEP is expected to address the problem of overlapping FTAs that the Philippines has with several countries.
The benefits that the RCEP Agreement will bring to the Philippines “far outweigh the risk, as it will promote greater openness, create a more business-friendly environment, encourage closer integration of economies, and provide a more stable and predictable rules-based system of trade,” the lawmakers said.
The resolution noted that the Department of Trade and Industry (DTI) has summarized the benefits of joining the RCEP Agreement in 4Cs. These are 1) Cheaper costs for sourcing key inputs for the manufacturing sector; 2) Convenience for businesses in trading with key FTA partners; 3) Competitiveness for Philippine industries; and 4) Complementation of existing government programs.
The authors said the RCEP Agreement will encourage foreign investments in the Philippines “and allow greater participation in the areas of digital services, business process outsourcing, financial services, aerospace, shipbuilding, and research and development.
“The recent state visits of President Ferdinand Romualdez Marcos Jr. to Indonesia, Singapore, and China not only generated billions of investment pledges but also expanded the economic opportunities of the Philippines by reinforcing foreign ties,” they said.
They further noted DTI Secretary Alfredo Pascual’s statement that the tariff liberalization under the RCEP will make preferential market access easier for Philippine exporters, thereby allowing the country to capitalize on potential market gains.
Based on the 2021 trade data from the International Trade Center, under the RCEP, only 15 agricultural commodity groups corresponding to 33 tariff lines will have lower tariff rates compared to some ASEAN+1 FTAs.
This is equivalent to only 1.9 percent of the total 1,718 agricultural lines and only 0.8 percent of the total agricultural imports. Of these 33 tariff lines, 17 are raw materials, eight are intermediate products, and only eight are final goods.
The remaining agricultural tariff lines will have equal or higher rates compared to other ASEAN+1 FTAs or are excluded from import tariff concessions under the RCEP.
“Joining RCEP will enhance our market access for key agri-based exports, as partner countries agreed to lower tariff rates on Philippine exports. Non-participation or delayed RCEP ratification may result in foregone opportunities. We aim to promote greater openness, create a business-friendly environment, and provide a more stable and predictable system of trade,” Balisacan said.
Earlier, Senator Imee Marcos did not sign the committee report on the RCEP agreement even though her brother, President Ferdinand Marcos Jr., has made it one of his priority bills.
Senator Marcos’ move may be moot since 16 senators have already signed the report, which is the number needed to ratify a treaty.
In not signing the committee report, Senator Marcos said she weighed the expected earnings from RCEP against the impact it would have on farmers and small traders.
“I am quantifying gains in electronics and garments versus agricultural damage from RCEP,” she said.
She conceded that there is a lot to gain economically from RCEP but said it would “ravage the countryside and kill our farmers.”