Forum on ASEAN Economic Integration, by PCCI Muntinlupa

Bienvenido “Nonoy” Oplas Jr.

Minimal Government Thinkers, EFN Asia, SEANET

Synthesis of Discussions,

“ASEAN Integration Forum”

Forum organized by the

Philippine Chamber of Commerce and Industry (PCCI)

Muntinlupa City Chapter, and

City Government of Muntinlupa

Vivere Hotel, Muntinlupa, 20 February 2015

Population, Million 1995 2015

Estimate

% Increase

Indonesia 194.8 255.1 31.0

Philippines 68.4 101.4 48.3

Vietnam 72.0 91.6 27.2

Thailand 59.5 68.9 15.8

Myanmar n.a. 51.8

Malaysia 20.7 31.0 49.8

Cambodia 10.8 15.5 44.0

Laos 4.9 7.0 44.3

Singapore 3.5 5.5 57.1

Brunei 0.3 0.4 46.0

Total 434.8* 628.3 44.5*

NOTE: All tables below I added/supplied to add more facts to what

panel speakers have said. Only Ruy Moreno gave powerpoint.

Elvie Sanchez-Quiazon, President, PCCI Muntinlupa City

• PCCI preparing local businesses for

ASEAN integration

• Only city that has a competitiveness

center

• Foreign chambers coming, friends

from Singapore, Germany, here,

• Mayor’s focus is on education

• How to optimize the integration

• Do we have enough infrastructures,

skilled labor

• Free trade will benefit consuers

• What will be the country’s competitive

advantage?

• Muntinlupa to be the investment

destination as goal

Jaime Fresnedi, Mayor, Muntinlupa City

• Vision, to develop Muntinlupa as a

competitve, business friendly city

• Difficulty in attracting FDIs

• WB’s “Doing Business” annual

report, PH has low rank.

• Cost of doing business in

Muntinlupa being slashed, renewal

of business permit cut the steps

• Launched the Competitiveness

Center with PCCI Muntinlupa

• ASEAN integration eliminates trade

barriers

• We should have a better chance at

success

Panel speakers, from left: Cindy Jarabata, Tony Abad, Ruy

Moreno, Roger Lamb, Arlene Dorayu, Bodo Goerlich.

Atty. Tony Abad, TA Associates

• ASEAN integration is about business

• People may think of it as discomfort, threats

• So much good things happening outside, somehow we’re left,

now we have to take advantage, enjoy shared prosperity,

• PH has always been protectionist, time to turn around

• Integration is already there. What we see are legalities

formalizing it

• But our local laws and regulations don’t match

• Open up business, remove barriers and legal impediments

• 3 pillars of integration: socio cultural community, security and

political stability, and economic community, AFTA in goods

• 99% of all goods intra-traded are at zero percent

• Services, intangibles, tourism, hotel, BPOs

• Movement of capital with the least hassle, harmonize system

• Competition law is needed, protect the consumers

• No need to bribe officials to keep monopoly, ensure efficiency

and competitiveness

• 3-4 years from now, we will see positive changes down the line.

Inter-ASEAN Tariff, Percent 2010 2014 2015

Vietnam n.a. 6.46 n.a.

Cambodia 4.84 5.72 n.a.

Laos 1.38 0.78 0.48

Myanmar 1 0.55 0.20

Philippines 0.18 0.13 0.11

Malaysia 0.41 0.05 0.05

Indonesia 0.06 0.04 0.03

Thailand 0.01 0.01 0.01

Brunei 0 0 0

Singapore 0 0 0

ASEAN Trade in Goods Agreement (ATIGA) tariff rates for inter-ASEAN trade.

ASEAN member states (AMS) to eliminate import duties on all products traded

among them by 2010 for the ASEAN-6 (Brunei, Indonesia, Malaysia,

Philippines, Singapore, Thailand) and by 2015, with flexibility to 2018, for

Cambodia, Laos, Myanmar and Vietnam (CLMV).

Source: Tariff

Commission,

Philippines

ASEAN Exports, in Billion US$

2000 2013 Multiple

Singapore 137.95 410.28 3.0

Malaysia 98.23 228.45 2.3

Thailand 69.15 224.91 3.3

Indonesia 62.12 182.55 2.9

Vietnam 14.48 132.14 9.1

Philippines 38.08 56.70 1.5

Brunei 3.91 11.43 2.9

Myanmar 1.96 11.20 5.7

Cambodia 1.40 6.53 4.7

Laos 0.33 2.26 6.8

2000 2013 Multi

ple

China 249.2 2,209.63 8.9

Japan 479.32 714.93 1.5

S. Korea 172.27 559.63 3.2

Hong

Kong 201.86 458.96

2.3

Taiwan 151.46 303.74 2.0

Source: ADB, Key Indicators of Asia and the Pacific 2014

The Multiple, 2013 over 2000, is not part of the ADB data; added only in this

paper.

Ruy Moreno, National Competitiveness Council

• PH geographically well-situated

• PH improved rannking WB-IFC, WEF, TI, HF

• Heritage Foundation, 89th in 2014, 76th in 2015, +13 gain

• WEF,2010-2014, +33 gains in global rank, from 85th to 52nd.

• Global Innovation index, 91 to 100, -9, from 2011-14

• From national to regional and city competitiveness, but difficult

to get data

• Propose creation of regional competitiveness committees,

composition 50-50 public-private leaders

• From 20th century mindset: protectionist, isolationist, no

continuity

• To 21st century mindset: globalization, supply chain, FTAs:

AEC, WTO, JPEPA, TPP, ASEAN-HK,

• PPP, public to simplify procedures, private to execute

• Think big, operate small; no more silos, teamwork

• Competition never sleeps, bar always rises, speed to reform,

maintain momentum

Cindy Jarabata

• We’ve been out for a long time, we are now in

• Tourism, PH only 4.6 M visitors, low vs neighbors’

• Tourism about 7% of GDP, but foreign tourism not that big

• Domestic tourism is real driver, 24-25M in 2013, 12-18%

annual growth

• Budget airlines, RORO, contributed to high dom. tourism

• Demographic dividends

• 64(?) branded hotels in, 5-10 years global operators coming in

• Entertainment City is promising. Consolidated strategy

• Opportunities, airports need to improve, other infra

• Weekender visitors not only locals, laready include Malaysians,

other neighboring Asians

• We should be our own ambassadors and invite friends abroad

• Beyond facebook, join instagram

• Integration is harmonization

• Businessmen complaints, hard to do business here.

Entertainment City, Gaming tourism in the PH

Roger Lamb, British Chamber of Commerce

• Lack of good infrastructures

• Ease of doing business, we are still too low in global rank

• Constitutional issues, banning foreign competition in some

industries

• ASEAN integration will not change that, only local consti

change

• European Economic Community, free movement of people,

capital, transparent laws

Arlene Dorayu

• Agree with the points by previous speakers

• Benefits of integration need to be shared to the communities,

inclusive growth

• Local preparedness, do we have enough infra, low electricity

costs

• Education, how responsive is HR development

• Need for continued dialogue of local governments with

investors and consumers, constituents

• Responsiveness of city govt to business facilitation, including

urban zoning policy

• Institutions, organizations like academe, encourage their local

involvement.

Bodo Goerhlich, German Chamber of Commerce

• Comptitiveness is 2-way

• Problems: BPOs sustainable? We help bring companies

from Europe to establish here, need well trained people

• Upgrade the skills of local people so EU companies can

hire/use them

• Problem how govt treats big companies; paperwork and

requirements getting more difficult

• More registrations, permits required

• Foreign chambers report to their countrymen, and PH

already has low FDI in the ASEAN

• More Europeans would like to come but in the news are

typhoons, earthquuakes, violence

• No direct flight to europe except Manila-London by PAL

• Costly and time consuming for Europeans to come here as

tourists, so they go to Phuket, Bali, Malaysia

• Unchain the business.

Trade Bureaucracies

Trading

across

borders

(rank)

Docs. to

import

(number)

Time to

import

(days)

Cost to import

($ per

container)

Singapore 1 3 4 440

Malaysia 11 4 8 560

Thailand 36 5 13 760

Brunei 46 5 15 770

Philippines 65 7 15 915

Indonesia 62 8 26 647

Vietnam 75 8 21 600

Myanmar 103 8 22 610

Cambodia 124 9 24 930

Laos 156 10 26 1,910

Source: WB-IFC, Doing Business 2015 Report

Ease or Unease of international trade, ASEAN:

Panel exchanges

Abad: treat people with ease and comfort, they will come in and

come back; Remove or reduce the restrictions

Moreno: challenge in leadership, public and corporate,

especially the frontline, like city hall. Do the extra mile in public

service

Jarabata: construction is expensive here; Meralco, take ages to

get electricity. Muntinlupa is not a tourist destination; look for a

niche, a brand for business ease

Moreno: SEC registrations/paperwork rising. But in the

Transparency International (TI) data, there is improvement, a

decline in corruption perception. Getting locals’ permit can create

uncertainty. Example, huge gold mine project (Tampakan) that

pass all national requirements, but provincial govt opposed open

pit mining, it’s not operating. business uncertainty.

Open Forum (1)

(1) Eng’g, other education, how developed?

• Moreno: foreign professionals are indeed restricted here

• Abad: we are obsessed with exporting our services but fending

off foreign services and professionals here

• Harmonization of services and professionals, mutually

recognized agreements (MRAs), so if they are already licensed

in Thailand, they can practice in the PH, etc.

• Moreno: not only in ASEAN but also in APEC

• Jarabata: global designs, we are not that high out there,

(2) Influx of massive investments, etc., impact on locals, how they

can adapt?

• Moreno: “we have to protect” has been uttered many decades

ago, face the competition and move on

Open Forum (2)

(3) How about the sari sari stores type?

• Moreno: jeepneys since 1945, now 2015, time to move on

• Abad: outside world will find their way in, we need to face it and

be more prepared,

• Need to lower taxes, highest income tax in the region but among

the worst infrastructure

• Integration will serve as benchmark; open up more opportunities

for the locals actually

• All econ integration in the world yielded positive results

• Gradual, not sudden influx; we are a globalized country

(4) Taxation, do we have enough incentives say for manufacturing?

• Moreno: more than taxes, high power/electricity costs affect

manufacturing, how to reduce it

• Connectivity is improving, BPOs as proof

• Property development, in other countries government leads,

private sector follows; somehow reverse in the PH

• Abad: nationwide simple rules will encourage investments.