The Philippines is grappling with uneven gains from its integration into the Southeast Asian regional economy, with persistent gaps in competitiveness and digital readiness threatening to limit benefits for Filipinos, according to a government think tank.
As the country prepares to chair the Association of Southeast Asian Nations (ASEAN) in 2026, a discussion paper by the Philippine Institute for Development Studies (PIDS) warns that the domestic economy is struggling to translate regional commitments into tangible results.
PIDS senior research fellow Francis Mark Quimba, PIDS supervising research specialist Mark Anthony Barral and PIDS former research analyst Alliah Mae Salazar found that nearly 46 percent of targets under the Philippine Development Plan 2023–2028 are unlikely to be met.
The study highlights critical shortfalls in agriculture, infrastructure and social protection. The authors noted there is no clear champion for a global ASEAN agenda, which they described as a missed opportunity to unify competitiveness, diplomacy and sustainability.
Trade data reveal a volatile landscape. While exports saw a brief rebound in 2022, they fell again in 2023, causing the Philippine share of intra-ASEAN trade to drop from 29 percent to 22 percent.
The shift places the country sixth among member states. Imports accounted for nearly 78 percent of total trade, marking the highest reliance on external supply chains in the region.
While regional tariffs have dropped near zero, the researchers identified non-tariff measures like technical standards and inconsistent border procedures as the primary obstacles to deeper trade.
The Philippines also trails regional peers in productivity and innovation. Labor productivity remains lower than in Singapore, Brunei, Malaysia, Thailand and Indonesia, while research and development spending stood at just 0.32 percent of gross domestic product in 2018.
Inclusion remains another area of concern. Youth labor force participation in the Philippines fell from 49 percent in 2015 to 45 percent in 2024. Despite these internal hurdles, the country has made strides in global engagement, reducing import tariffs for regional partners to 1.05 percent in 2022 and seeing outbound foreign direct investment surge in 2023.
The researchers pointed to the Regional Comprehensive Economic Partnership (RCEP) and the ASEAN Digital Economy Framework Agreement as vital drivers for future growth.
However, they cautioned that a business-as-usual approach will not suffice amid climate risks and geopolitical tensions. The report recommends that the government fast-track digital regulations, improve rural connectivity and align trade policies with green standards.
To fully benefit from a connected regional economy, the study urged the private sector to deepen its role in regional supply chains and foster innovation.
How the Philippines addresses these gaps will determine its leadership role in ASEAN and the long-term economic opportunities available to its citizens, it said.
