Finance Secretary Benjamin Diokno welcomed the approval of the Senate resolution concurring in the ratification of the Regional Comprehensive Economic Partnership (RCEP) agreement on February 21, 2023.
“The ratification of the RCEP is key to a more open, transparent, and predictable trade and investment environment. Deeper economic integration among the RCEP member states will expand the country’s market access for goods and services, attract more investments, and create more and better jobs,” Secretary Diokno said.
Senate Resolution No. 485 was approved on third and final reading, with 20 affirmative votes, one negative vote, and one abstention.
RCEP is the largest regional free trade agreement (FTA) in the world, accounting for 30 percent of the world’s population, 29 percent of gross domestic product (GDP), 29 percent of trade, and 33 percent of global inward investments in 2020.
FTAs such as the RCEP support the growth and development of businesses, which make these frameworks strong drivers for post-pandemic economic recovery efforts.
The RCEP was signed on November 15, 2020 by ten ASEAN member states (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam), the ASEAN+3 countries (China, Japan, and South Korea), and ASEAN+6 members (Australia and New Zealand).
Since its date of effectivity on January 1, 2022, all RCEP participating countries have ratified the agreement, except for the Philippines.
The Department of Finance (DOF) has been advocating the benefits of the RCEP, which takes into account emerging trade issues affecting small and medium enterprises (SMEs), e-commerce, competition, intellectual property, and government procurement that were not covered in existing FTAs.
Key benefits of RCEP
The RCEP provides enhanced trade facilitation provisions that make cross-border trade simpler and more efficient.
This will result in a stable and predictable business environment to attract more investments in the Philippines and safeguard the country’s investments abroad. The agreement will also support MSME development and drive participation in the global value chain.
Moreover, the Philippines will benefit from economic and technical cooperation support in order to strengthen its competitiveness.
Zero or lower import tariffs for Philippine exports such as agricultural products, automotive parts, and garments would give the country more access to bigger markets for its products.
Philippine manufacturers would also benefit from wider sources of raw materials due to zero or lower import duties on their inputs as well as more flexibility in the rules of the FTA on product manufacturing.
Skilled Filipino professionals and business persons in legal, construction, engineering, and banking services will be given preferential treatment to practice their professions in participating nations.
Finally, Philippine intellectual property rights will be upheld and given stronger protection to ensure the interests of Filipinos.
