THE Philippines must promote trade in services that harness the potentials of global value chains (GVC) in order to maximize gains from free trade agreements (FTA) and the Asean Economic Community (AEC).
Trade Assistant Secretary for Industry Development Rafaelita Aldaba said over the weekend that the country currently has comparative advantage in information technology-business process management and services.
“Globally competitive services create quality jobs, move up the value chain, enable structural transformation,” she said during the recent first Philippine services conference and roundtable discussions.
To achieve the benefits from FTA and AEC, Aldaba underscored the need to increase investment in infrastructure services, move up to high value-added services in GVCs, and address horizontal issues—particularly regulatory and policy environment.
“Given the difficulties in changing the Constitution, strengthen the regulatory framework and effective implementation of the competition law to ensure a level playing field,” she said.
“Benefits [are]not achieved automatically, significant challenges exist,” she added, noting the need to address domestic constraints preventing services growth.
Carlos Bernardo Abad Santos, officer-in-charge and assistant director general at the National Economic and Development Authority, said the integration of trade into services is one of the essential elements in the realization of the AEC.
He said the Philippines is a services-led economy, with a gross value-added share of 57.1 percent of the country’s gross domestic product and 54.7 percent of total employment in 2015.