The Philippines’ participation in the mega free trade deal Regional Comprehensive Economic Partnership (RCEP) would result in a 2.02% increase in its real gross domestic product (GDP), the Philippine Institute for Development Studies (PIDS) said Tuesday.
This was according to the study of PIDS senior research fellow Francis Mark Quimba, PIDS supervising research specialist Mark Anthony Barral, and PIDS research analyst Abigail Andrada, the state think tank said in a statement.
Should the country opt out of the trade deal, there would be a decline of about 0.26%, the PIDS said.
RCEP is a trade accord that involves the 10-member ASEAN along with China, India, Japan, South Korea, Australia, and New Zealand.
The RCEP will facilitate free or liberalized and simplified trade among the participating nations in the Trans-Pacific Region.
The Senate is set to vote on the trade deal’s ratification.
The PIDS said its study assessed the country’s trade performance and participation in the RCEP and analyzed different scenarios related to the agreement.
RCEP was signed by Trade Secretary Ramon Lopez, on behalf of the Philippines, in November 2020 at the conclusion of the 37th Association of Southeast Asian Nations (ASEAN) Summit and Related Summits.
The trade pact aims “further liberalize trade in goods and services while enhancing competition policy, intellectual property rights, investment, technical cooperation, government procurement, and others.”
The PIDS said the RCEP was also viewed as “a strong commitment to supporting economic recovery, inclusive development, job creation, and strengthening regional supply chains, as well as support for an open, inclusive, rules-based trade and investment arrangement.”
The state think tank said the trade pact “can be a catalyst for economic development.”
However, it said the Philippines should improve its trade openness, sectoral orientation, and complementarity.
For instance, the country scored below 100% in trade openness in 2018 along with Indonesia and China.
This showed that the country has not followed a growth path similar to its neighbors in the region, particularly Thailand and Vietnam, that scored above 100%.
The PIDS urged Philippine businesses to internalize the reduction in trade costs.
“This can be done by increasing the awareness and utilization of Philippine trade agreements,” it said.
The think tank called on for support for private sector innovation and exploration of new products and new markets.
Economic think tank IBON Foundation has warned against ratifying the RCEP, noting that the Philippines' agriculture sector is grossly unprepared for further liberalization.
Previously, SINAG also pushed the Senate to reject the RCEP deal, citing negative impact on the local agriculture industry.—AOL, GMA News