SINGAPORE—Ayala Corp. chair Jaime Augusto Zobel de Ayala said the Philippines should play an active role in pursuing the integration of Southeast Asian economies, believing the country stood to benefit on a net basis from the plan.
Contrary to fears that the Philippines could lose out in a regime of tighter market competition in the region, Zobel opined that the country actually had comparative advantages that should make integration beneficial to Filipino businesses.
“It is in our best interest to do what we can [to pursue] the integration initiative,” Zobel told the Inquirer yesterday at the sidelines of a conference held here and organized by the Network Asean Forum (NAF).
He said that with a competent labor force and favorable macroeconomic fundamentals, the country could entice more investments when these could freely flow across countries in the region.
Zobel cited the services sector, which enjoys continually growing foreign investments because of the skills of the country’s labor force and appropriate information and communication technology infrastructure.
“We are now the fastest-growing economy in the region. And unlike some of our neighbors that suffer from current account deficits, we enjoy a current account surplus,” he pointed out.
The positive macroeconomic fundamentals, he said, were an indication of the country’s resilience to global shocks and that should make the country a winner when the Asean economies have been integrated.
His view contrasted those of critics who feared that the Philippines was not yet prepared for integration because this could encourage local businesses to invest elsewhere. In particular, countries believed to have better infrastructure and regulatory environment could entice Filipino businesses away from the Philippines.
Moreover, with stiff competition, small businesses in the country are feared to lose out against foreign giants.
Economists noted that in order for the Philippines to compete head on with its neighbors, it should invest more heavily in infrastructure, rationalize regulations for some sectors and ease the processes for setting up businesses.
NAF, of which Zobel is a co-founder, is a private sector-led organization pursuing the realization of the proposed integration of member economies of the Association of Southeast Asian Nations (Asean).
Representatives from the business sector of Southeast Asian economies discussed bottlenecks to the integration during the conference held yesterday. NAF is expected to submit policy recommendations gathered from the participants to concerned governments on how the problems confronting Asean integration should be addressed.
Under the original plan of the Asean, member economies are supposed to be fully integrated by 2015. This means there should be completely free movement of capital, goods and labor across the region.
Both private and government observers, however, have acknowledged that a fully integrated Asean economy might not be possible by 2015 because of a host of bottlenecks, including tight regulations on certain areas.
NAF believed that full integration should be pursued, although a new timeline should be looked at given that 2015 was just less than two years away. NAF acknowledged that progress toward integration has been slower than earlier planned.
NAF said an integration would help boost investments, job creation and, in the process, incomes. Integration is also expected to make Asean a more powerful region in the global economy.