Despite the recent preview of more foreigner-friendly ownership rules in local utilities, the Philippines is still not ready to join a multilateral trade deal that includes major economies like the United States, Australia and Singapore.
Seeking to manage expectations, Trade and Industry Secretary Gregory Domingo said the government wanted the country to be included in the regional trade pact known as the Trans-Pacific Partnership (TPP). However, more reforms are still needed before the country’s application is seriously considered.
“We still need to do a lot of homework on our side,” Domingo said this week, adding that the country’s main weaknesses were in the areas of the environment, labor reforms and the promotion of investments in equities.
“It would require a lot of resources to get to it right now, and we don’t have it yet although we are beefing up,” Domingo said.
He said the department’s immediate concern was the expansion of the country’s tariff negotiating team. “We have a very small one and we’re expanding it,” he said.
The TPP is a multilateral agreement between countries like the US, Singapore, Malaysia and Chile that seeks to lower trade barriers among participating countries. The regional pact also aims to strengthen patent protection in the said countries.
The latest entrant was Japan, which reached a deal to join the TPP this month. Tokyo estimates that joining the TPP would boost its gross domestic product (GDP) by $32 billion.
US Ambassador to the Philippines Harry Thomas Jr. earlier said the continued reforms in good governance, reducing corruption and the improvement in the country’s legal system would boost the Philippines’ chances in joining the TPP.
Another key sticking point is the constitutional restriction of foreign ownership in certain industries.
Foreign entities are banned from owning majority stakes in telecom, water and electricity companies, all of which operate under congressional franchises.