PHL’s benefits from ASEAN integration have been seen as uneven due to competitive gaps
The PHILIPPINES benefiting from deeper integration with the Association of Southeast Asian Nations (ASEAN) is expected to be even due to issues related to competitiveness and digital readiness, said a government think tank.
In a report, the Philippine Institute for Development Studies (PIDS) added that the Philippines is at risk of falling behind in reaping the benefits of its regional commitments.
“Progress in the integration of the ASEAN Economic Community (AEC) reveals the mixed situation of the Philippines,” PIDS said in a report released on January 22.
This year, the Philippines is preparing to take over the chairmanship of ASEAN.
“There are tangible gains in trade openness, macroeconomic stability, and human development. However, major challenges remain in industrial productivity, climate resilience and governance,” it added.
PIDS estimates that about 46% of the targets set forth in the Philippine Development Plan (PDP) 2023-2028 are unlikely to be achieved, based on indications from the AEC (ASEAN Economic Community) Blueprint 2025.
This deficit may be noticeable in sectors such as agriculture, infrastructure, peace and security, and social protection, “which are defined as important for regional and global competitiveness.”
“Although the PDP is broadly aligned with the pillars of the AEC, gaps remain in translating alignment into results,” he said.
It also noted that the country has reduced import prices from ASEAN Free Trade Agreement partners to 1.05% by 2022, however ASEAN’s additional trade relative to GDP remains low.
Last year, the ASEAN-China Free Trade Area was signed to bring the region’s economic relations with China in line with other global arrangements.
“The study notes that ASEAN’s deepening trade and investment ties with China – while economically beneficial – also exposes the region to risks arising from political tensions,” it said.
Instead, it has pushed for diversification and regional structures such as the Regional Comprehensive Economic Partnership to maintain investor confidence.
“There is no clear identity or champion for a ‘Global ASEAN’ – a missed opportunity to organize global competitiveness, diplomacy, and sustainability under one coherent agenda,” the authors said.
Meanwhile, the think tank warned that a “business as usual” scenario could destroy the Philippines’ powerfill ASEAN commitments.
In response, PIDS recommended deepening intra-ASEAN economic integration by reducing trade costs, increasing the participation of micro, small and medium enterprises in the region’s value chains, re-evaluating tariff-free mechanisms, and establishing targeted investment channels.
It also called for faster digital adoption through stronger regulation, wider rural connectivity, digital skills training, and improved interoperability of government systems.
The discussion paper, “The ASEAN Economic Community through the Years: Benchmarking, Emerging Trends, and Ways Ahead,” was written by Francis Mark A. Quimba, Mark Anthony A. Barral, and Alliah Mae C. Salazar. – Aubrey Rose A. Inosante
