By the end of December, 2015, ASEAN Member States (AMS), including the Philippines, will integrate into a single market and production base, realizing the vision of an ASEAN Economic Community (AEC).
This regional bloc is estimated to be worth $2 trillion and will encompass some 600 million consumers or around 9 percent of today's world population.
Once the AEC is fully realized, goods, services, investment, capital, and talent will be highly mobile, enabling synergies and economies of scale that leverage on the cultural diversity and abundant natural resources found across the 10 nations.
The region is already considered an economic pillar in Asia, with 5.4 percent GDP growth in 2012 that surpassed India's 4.0 percent. Some project that the ASEAN economy will double by 2020, valuing at $4.7 trillion.
Hence, optimism runs high on the AEC's potential contribution to global growth amid persistent uncertainty and economic depression throughout the developed world.
In the 2013-2014 ASEAN Business Outlook Survey, 79 percent of US firms in the ASEAN reported that their investment in the region increased over the past two years, as 9 out of 10 respondents expected it to grow within the coming five years. Up to 84 percent of the executives interviewed expect an increase in profits.
The Philippines is seemingly poised to capture a lion's share. The same survey named the country as the most improved ASEAN nation, citing a stable government and political system as among the main reasons for the increased confidence.
Yet, respondents identified Indonesia, Vietnam, Thailand, and even Myanmar as the top choices for business expansion, marking how the Philippines remains unable to attract a steady stream of foreign direct investments.
Last year's FDI inflow of $2.8 billion into the Philippines, though up by 185 percent, paled in comparison to Indonesia's ($19.9 billion), Thailand's ($8.6 billion), Vietnam's ($8.3 billion) and was only slightly higher than Myanmar's ($2.24 billion), according to a 2013 UNCTAD report.
Many still attribute this laggard status to perennial issues with low-quality infrastructure, high utility costs, bureaucratic inefficiency, poor enforcement of contracts, government corruption, a limited human resource pool, and even constitutional limits on foreign ownership over certain industries.
These are only some of the issues that have to be addressed before 2015. Various sectors have also expressed concern that they are ill-prepared to meet the looming stiff competition from their ASEAN counterparts.
For instance, some leading domestic banks, though well-capitalized, will be easily dwarfed if larger commercial banks enter the country.
Automobile assemblers cite smuggling and the continuous entry of second-hand cars as contributors to their vulnerability compared to their peers in Malaysia and Thailand.
Exporters of agricultural and manufactured goods highlight lack of access to finance and technology as bottlenecks to their competitiveness.
In my recent travels, I have witnessed how the AEC has dominated the public discourse in Vietnam, Malaysia, Indonesia, and other countries throughout the region.
Integration is some two years away, though only now has it entered our mainstream discussions.
Government must urgently lay down and communicate a unified policy direction that charts the country's transition into the AEC.
Last week, Senators Sonny Angara and Bam Aquino filed a resolution calling on the Senate Committee on Trade and Commerce to conduct an inquiry into the opportunities and threats the looming integration poses on the country.
Legislation may be necessary to institutionalize the necessary regulatory changes, but concerted effort must also come from executive as well as the private sector if the Philippines is to benefit at all from the upcoming regional integration.
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