BY 2015, the 10 nations that make up the Association of Southeast Asian Nations envisions an “Asean Economic Community,” which will establish “a highly competitive single market and production” through the integration of their economies.
The question is, are we prepared to meet the competitive challenges in terms of integrating with other countries in the region?
Some groups believe that the Philippine may not yet be out of the race to promote integration of our economies, since the country somehow seems unprepared to meet the competitive challenges, for instance, when trade barriers are lifted to allow for the free flow of goods and services in the region.
Here’s a bit of a background for those of us who have not followed this issue closely.
Philippine Representative in Taiwan Antonio Basilio cited the Asean Agreement on the Movement of Natural Persons (MNP), which he said, is one of the series of steps leading to the establishment of the Asean Economic Community (AEC) by 2015.
The MNP, he said, is a subsidiary agreement necessary to the implementation of the Asean Framework Agreement on Services (AFAS) as it covers the so-called Mode 4 in the delivery of services.
“It covers business persons,” Basilio said, noting that the MNP Agreement is specifically “limited to business visitors, contractual service suppliers and intra-company transferees.”
“Hence it covers skilled workers, professionals and executives, and only for their temporary entry,” he said.
The MNP Agreement, on one hand, “does not allow for permanent entry by such persons, nor does it allow for movement of all persons [e.g., unskilled labor] even on a temporary basis,” he added.
In looking at its impact on labor in the Philippines, Basilio said that we should take into account that “it is tied up with concessions made under the Asean Framework Agreement on Services.”
“The impact will primarily be on skilled labor,” Basilio said, citing that it is “reciprocal” which means that our country “will also allow service providers from other Asean countries to send their skilled workers to the Philippines in the course of rendering a contracted for service.”
“Since we have an advantage in terms of the number of skilled workers [able to speak English]and lower wages than some Asean countries, it is more likely that there will be a net outflow in our favor,” Basilio explained.
“It likewise does not prevent Asean service providers from hiring Filipinos to perform services not only in the Philippines, but in other Asean countries as well,” he added.
Thus, Basilio noted, this integration of Asean economies will provide opportunities for our “skilled workers” to work in other Asean countries.
However, he said, some jobs may require specific skills or qualifications such as lawyering, medical services.
“So it is even more important now that there be mutual recognition of professional standards and that our curriculum are in consonance with Asean-wide requirements,” Basilio said.
For unskilled workers such as factory workers and household help, “the usual labor and immigration laws will apply,” he added.
According to Budget Sectrary Florencio Abad, there are and will always be differential impacts across countries arising from the integration of the Southeast Asian economies.
“The Asean region is a huge market; it is home to many emerging markets,” Abad said, citing that there would be even more economic opportunities, but the Philippine government still has a lot to do.
For our country to properly gear up for Asean 2015, the government must continue a structural transformation of the economy to make it more investment and industry-led, he said.
“The free entry of goods and services across economic borders can only mean more economic opportunities for countries in the region and therefore more opportunities for employment and livelihood,” Abad said.
“The challenge for us in preparation for this new regime is to sharpen our competitiveness and facilitate the ease of doing business in our jurisdiction,” he added.
While the government perceived the overall impacts will be positive, some labor groups consistently find the regional economic integration causing a drag on our growth and development.
Kilusang Mayo Uno (KMU) Chairman Elmer Labog described the 2015 Asean integration as a “further implementation of neo-liberal policies.”
He explained that it is “the consolidation of wealth and power of the multi-national corporations as well as those on the Forbes list.”
“It will not redound to the distribution of any gains in growth to workers and poor people,” Labog said. “It will likewise be a signal to repress people who would go against such an exploitative arrangement.”
The KMU chair said that this integration will also lead to “more contractual workers with much lower wages and benefits.”
“May create more employment but what kind of employment?” Labog said, citing that this will only enhance “the cheap Labor policy of the government,” which he said, will far surpass the 5,000 a day exodus of labor at the present.
“Obviously, the Philippine government has prepared to meet such 2015 Asean integration by putting in place the two-tiered wage system which will allow wages much lower than the current regionalized scheme,” Labog added
Labor becomes vulnerable
With the integration of the Southeast Asian economies, the country’s labor becomes “vulnerable,” according to the Federation of Free Workers (FFW).
Antonio Asper, FFW vice president for external affairs, said that they are very wary about Asean 2015 Economic Integration.
“Down to bedrock, the exercise actually means liberalization, deregulation and privatization — three policies that in the past, as it is still, result in a race to bottom in labor standards, in the displacement of labor, and in weakening the unions,” Asper said.
The Department of Labor and Employment (DOLE) through the National Tripartite Industrial Peace Councils, he said, has organized consultations between trade unions and representatives of employers with various agencies of government about Asean and the planned 2015 Economic Integration.
“This we appreciate,” Asper said, but the labor groups are concerned that “the continuing race to the bottom in labor standards and displacement of labor arising from the policy triad” will be accelerated by the Asean 2015 Economic Integration.
“There seems to be no strategic development plan to mitigate our worries and to address our concerns,” Asper said, citing in particular, the sugar industry, which he said, might be severely affected while rice importation might intensify as a result of the economic integration.
Also, he noted, the economic integration by 2015 “might place stumbling blocks to the planned revival of industries and manufacturing.”
“The problem is that no credible studies have been made to identify the ‘winners’ and ‘losers’ come 2015 and no social safety nets are in place to help the ‘losers’ recover and become competitive. If then, labor displacement will most probably happen,” Asper pointed out.
The KMU official, on one hand, recognized the “free flow of skilled labor and professionals” in Asean as a result of the economic integration “gives the country and its labor certain advantages.”
“However, at the Asean level, the preparations are still incomplete: the instruments to enforce the Asean Declaration on the Rights and Protection of Migrant Workers are not yet there; nor will they be there by 2015,” Asper added
He also cited over-reliance on remittances from migrant workers, which he said, “increases the social downside in broken families and exploitation of Filipino labor in host countries.”
“We contend that without an industrial plan being implemented that will employ more workers in the Philippines, migrant work can not really be a choice,” Asper added.
Presidential Communications Secretary Herminio Coloma Jr., meanwhile, said that the Aquino government is still committed to achieve win-win outcomes for all.
The expansion of the economy aims to create more jobs and livelihood opportunities, and contributes meaningfully to poverty reduction, he said.
“Hindi natitinag ang administrasyon sa layunin nitong ibsan ang kahirapan at iangat ang kabuhayan ng mga Pilipino. Iyan ang konteksto ng pagsulong ng ekonomiya ng bansa na sanay kahanay ng mga kaganapan sa Asean. Kapakanan ng Pilipinas at mga Pilipino ang dapat mangibabaw,” he said.
“Nararamdaman na ito dahil sa patuloy na pagpapahayag ng positibong saloobin sa pamumuno ng Pangulong Aquino,” Coloma added
President Aquino did promise to bring about “inclusive growth” as he vowed to provide thousands of stable jobs in the remaining three years of his term.
“This is what our government has chosen to do. We cannot have a society where a few flourish and the rest just make do with crumbs. We must have inclusive growth,” the President said.
In order to empower the Filipino people, Mr. Aquino also noted that the government needs to maximize opportunities.
“And while no one can guarantee outcomes, I believe it is incumbent upon government to provide meaningful opportunities to individuals, and an environment conducive to empowering our fellow citizens to seek out and maximize opportunities that come their way,” the President added.