Purisima: Trans-Pacific Partnership a golden opportunity we must work hard not to pass up
We congratulate the 12 member nations of the Trans-Pacific Partnership as they ink the deal Auckland today. Progress takes walks on long roads, but today I believe their decision to journey together ought to take them farther than they would have gone alone.
I remain strongly in favour of Philippine membership to the TPP. The Department of Finance reiterates our strong position that the Philippines stands to gain from becoming a member of the trade pact, and that ASEAN’s admission into the TPP as a region will be a boon to TPP countries. Buoyed by vibrant demand and demographics, intra-ASEAN trade grew by 17.93% in just 2 years from 2012-2014. ASEAN features diverse countries forming a constellation of supply chains with complementary goods, with the potential to ultimately transform trade from intermediate goods to final consumption goods.
ASEAN has built-in links with TPP member nations—a good foundation I am optimistic can further be expanded with TPP membership. For example, ASEAN ranked 5th in total trade with the United States and outmatched South and Central America in terms of foreign direct investments (FDIs) flowing into the US.
ASEAN’s strength cannot be underestimated. For the first time ever, in 2013, FDIs into the ASEAN 5 was greater than FDI into China. Taken as a region, ASEAN ranks 4th in world trade, after Germany—worth $2.47 trillion in 2012. Thus, I believe admission of ASEAN as an entire region into the TPP will come out as a net benefit not only for us, but for those who are already members of TPP.
TPP membership bodes well for economic performance at home as well. An April 2014 Philippine Institute of Development Studies paper projected that the value of Philippine exports will rise if it participates in the TPP. According to the study, the increase in exports ranges from 0.44% to be realized from year 2 to 11 of joining.
The Peter G. Peterson Institute for International Economics came out with a study in 2012 projecting that the Philippines to be the 4th largest beneficiary in terms of the percentage increase in GDP (estimated US$22.1 billion gain in 2025) under a TPP16 scenario. This is a future that I very much look forward to.
Presently, the Philippines can enjoy a window of opportunity to observe an incubating period as implementation sets in. It is useful to be vigilantly critical as the dust settles around the current members of the pact, in order to better prepare ourselves for entry in the hopefully near future.
The Trans-Pacific Partnership has the potential to be one of the most reliable drivers of growth when the global environment turns sluggish. The potential to join the trade grouping is a golden opportunity we must work hard not to pass up.
