PH still a ‘growth story’ – business leaders
THE country will gain more than it will lose from the Association of Southeast Asian Nations (Asean) integration next year, participants at a key economic forum said on Wednesday.
JG Summit Securities Inc. senior vice president and chief strategist Bach Johann Sebastian said during the ING-Economic Journalists Association of the Philippines Forum that the Asean Economic Community (AEC) next year will result in “lower inflation and food prices, higher wages for highly skilled laborers, and more opportunities locally” over the long term.
“There will be winners and there are losers —sectors to benefit and to suffer,” Sebastian said.
“In the next five years, the wages of these highly skilled people will rise because of the demand not just in the Philippines, but also outside the country. So with this demand, we will see higher wages of these workers,” he said.
“We can even see lower inflation rates and food prices because of the lowering of tariffs, [commodities]will come in more freely.
That’s the good news,” he added.
This was seconded by Jollibee Foods Corp. Chief Financial Officer Ysmael Bayson, saying that the country’s “young and educated labor force” will be able to go in and out of the country easily, having access to working visas overseas as well many opportunities in the Philippines.
Sebastian said the sole loser in the regional integration will be the agricultural sector, citing cheaper and better rice importation from Vietnam and Indonesia, as well as the lagging domestic sugar industry.
“[The] agricultural sector is a very serious problem because it concerns the farmers, the countryside and it is a long time problem of the country,” Sebastian said.
Bayson, on the other hand, said that the lack of infrastructure and facilities for the agri-business sector — roads, bridges, irrigation, rice mills and storage facilities — will result in further post-harvest losses.
“We have a lack of storage facilities, and if we can’t store the crops, we incur post-harvest losses, because harvested crops will be sold all at the same time. And if they are all sold at the same time, prices will drop, resulting in a lower profitability in the agricultural sector,” Bayson said.
The officials said the government should focus on the agricultural sector in order to compete with neighboring countries in the region.
“Never mind the businesses, the companies would know what to do. There are a lot of opportunities in the services and industrial sector,” Sebastian said.
“Larger companies will be the ones ready to take advantage of the integration. But eventually other smaller companies will catch up…the Philippines will benefit most from the free movement of services,” Bayson said.
The 2015 AEC will enable the free flow of goods and services across the Southeast Asian region by January next year.