Palace says RCEP ‘so crucial’ to attract investors, create more jobs
By a 20-1-1 vote, the Senate on Tuesday ratified the country’s membership in the Regional Comprehensive Economic Partnership (RCEP), which Senate President Juan Miguel Zubiri said would help create 1.4 million jobs, address longstanding issues in the agricultural sector, and encourage investments.
Most senators voted “yes” to the free trade agreement, but opposition Sen. Risa Hontiveros voted “no” and Sen. Imee Marcos – sister of President Ferdinand
Marcos Jr., who has been pushing the regional pact as part of his administration’s priority measures – abstained.
Sen. Marcos sought permission from the chamber to abstain, citing the legacy of her father, former President Ferdinand Marcos Sr., and noting in Filipino: “bigo pa rin ang nakararami sa bukid at sa parang” (the failure of many in the farms and the fields).
Hontiveros said 131 groups from various sectors believe the Philippines is not ready for the free trade agreement between the ten member states of the Association of Southeast Asian Nations (ASEAN) and its five FTA partners: Australia, China, Japan, New Zealand, and the Republic of Korea.
Since it involves ratification of a treaty, at least two-thirds of the 24-member Senate, or 16 senators, needed to concur for its approval.
Apart from Zubiri and Senate President Pro Tempore Loren Legarda, who defended the RCEP in the plenary, those who sustained the ratification were Majority Leader Joel Villanueva, Senators Jinggoy Estrada, JV Ejercito, Sonny Angara, Nancy Binay, Alan Peter Cayetano, Ronald dela
Rosa, Christopher Go, Sherwin Gatchalian, Lito Lapid, Robin Padilla, Cynthia Villar, Mark Villar, Grace Poe, Ramon Revilla, Francis Tolentino, Raffy Tulfo, and Senate Minority Leader Aquilino “Koko” Pimentel III.
Sen. Chiz Escudero interpellated but was out of the session hall during the voting, while Sen. Pia Cayetano was absent.
Prior to the voting, the senators and the country’s economic managershad a closed-door briefing. Before the ratification, the Philippineshad been the sole RCEP signatory yet to concur with the agreement.
Earlier in the day, Malacanang said the ratification of the free trade agreement will help the agriculture sector be competitive and productive, as it is “so crucial” in helping the economy.
“By being a member, we are saying to the world that we are ready for business, [you] are welcome here, we play the rules of the game well and your investment is safe with us,” National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said in a Palace press briefing.
Balisacan also refuted criticisms citing the reported dangers posed by RCEP for agriculture.
“It must be ratified. The future of our country depends so much on our ability to attract investors, particularly foreign capital because thedomestic capital is not enough… By being a member, we are saying tothe world that we are ready for business, we play the rules of the game well, and your investments are safe with us,” he said.
“With regards to the allegation that the agricultural sector will be hurt, there’s no truth to that… whether or not there is RCEP, we need to invest in agriculture. We must address these concerns,” the socioeconomic planning chief said.
By ratifying the free trade deal, the country will be “even more forced to pay attention to agriculture because only then can you fully maximize the benefits that RCEP can give to us,” he said.
“The current problems of (PH) agriculture have nothing to do with RCEP. The problems were outcomes of past neglect of the sector,” the NEDA chief pointed out.
President Ferdinand R. Marcos Jr. earlier said RCEP would be good for the country because of the increased trade it would bring to its different member economies.
The Philippines is going to continue increasing its investment in the agricultural value chain to make it more competitive, the Chief Executive said, adding RCEP will allow the country to further strengthen its agricultural value chain.
The Makati Business Club (MBC) also supports the RCEP ratification, urging senators to sign off on the deal “to help businesses expand abroad, strengthening the economy and accelerating job creation.”
“We believe joining RCEP is essential to this as it will comprise 15countries, 2.1 billion people, and around 30 percent of global GDP.
While RCEP would help us enter foreign markets, it would also expose our industries to more competition at home. We recognize that there are valid concerns about this. However, we believe that adequate safeguards have been included,” the influential business group said.
MBC also believes that friendly competition with fellow RCEP members will lead to better local players and better products and services for Filipinos.
“We welcome the effort that the administration, especially Secretary Alfredo E. Pascual and the DTI (Department of Trade and Industry), have exerted to further RCEP and encourage the Senate to give it positive consideration,” MBC said.
Zubiri and Senate President Pro Tempore Loren Legarda defended theRCEP agreement during the period of interpellations, elaborating on the expected benefits of the agreement to the country should the Senate grant its concurrence to its ratification.
The Senate leader said RCEP is expected to foster the creation of 1.4 million jobs by 2031—a conservative estimate cited from a study conducted by Dr. Caesar Cororaton, broken down into 308,000 jobs in agriculture, 77,000 jobs in industries, and 991,000 in services.
Zubiri also said that non-participation in the RCEP is expected to lead to a -0.26 percent decrease in real GDP (gross domestic product), according to a study by Dr. Francis Quimba.
Participation, meanwhile, is seen to lead to a 2.02 percent increase in GDP, the Senate President said.
“We would be left behind in foreign direct investments (without RCEP). Trade diversion would happen. If we don’t join RCEP, investors will go to other countries, because they will have broader markets,” Zubiri explained.
He noted that in the clothing industry, the Philippines used to be the biggest manufacturer in the region, but now has yielded to Cambodia and Laos – “especially now they are in RCEP.” (See full story online at manilastandard.net)
“Their materials are cheaper under RCEP, but we have higher tariff rates. These are lost opportunities for us, but we can catch up with RCEP,” Zubiri said.
He also reiterated that protections would remain in place for the agriculture sector, as major Philippine agriculture products are excluded from the pact and tariffs would not be touched or lowered there.
The excluded agricultural goods from RCEP are swine meat; edible offal of bovine, swine, sheep, goats, horses, asses, and mules; poultry meat; potatoes; onions, garlic, and other alliaceous vegetables; cabbages, cauliflowers and similar edible brassicas; carrots; cassava; lettuce; sweet potatoes; coffee and instant coffee; corn; rice; cereal; grains; other prepared or preserved meat; tunas in airtight containers; sugar; and feed for animals.
Zubiri stressed that RCEP will open export opportunities for Filipino farmers and food producers, particularly in the fisheries sector and the processed produce sector.
The Senate resolution on the RCEP comes with a set of guidelines for the implementation of the agreement, he said.
“We’re never going to abandon the agriculture sector, and we will have a Senate Special Oversight Committee to make sure that our agencies are following the guidelines and fulfilling their mandate to our farmers, fisherfolk, and other sectors,” Zubiri said.
As part of the guidelines, the Senate will direct the Department of Agriculture to oversee the full and successful implementation of its banner programs, including the National Rice Program, the National Corn Program, the National High Value Crops Development Program, and the National Livestock Program.
“I’ve been in public service for a while, and what frustrates us most is that we have good initiatives, but they’re not implemented on the ground. It’s a shame,” he said.
“So, in the oversight committee that we will set up, we will make sure that we will monitor the implementation of these programs.”
Those opposing the agreement have a mechanism where if the funds generated by RCEP don’t reach them, “they can come to us and we will reprimand the agencies involved, and we will ask them to account for every peso and centavo come budget season,” Zubiri said.