THE US initiative to re-engage economically in the region, known as the Indo-Pacific Economic Framework (IPEF), is consistent with the Philippines’ desire to promote inclusive growth and quality job creation, the Department of Trade and Industry (DTI) said.
IPEF, widely viewed as a counter to the gains made by China in the region, was announced in Tokyo on Monday by US President Joe Biden.
Trade Secretary Ramon M. Lopez attended the virtual IPEF launch and delivered a message on behalf of President Rodrigo R. Duterte, who called IPEF aligned with Philippine economic and development priorities.
IPEF participants, apart from the US, are Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.
“The broad themes of the IPEF are generally aligned with the Philippines’ economic and development priorities; advancing resilience, sustainability, inclusiveness, and competitiveness are consistent with the Philippines’ interests and development objectives,” Mr. Lopez said.
“We affirm the importance of promoting emerging areas in trade, technology, and digital economy. The IPEF’s pillars on supply chain resiliency, clean energy, decarbonization, and infrastructure are consistent with the joint vision statements for a 21st century US-Philippines partnership,” he added.
Mr. Lopez said the Philippines is looking forward to the greater participation of other countries, particularly those belonging to the Association of Southeast Asian Nations (ASEAN).
ASEAN countries that have not signed up to IPEF are Myanmar, Cambodia, and Laos.
“We welcome the US’ assurance of support for ASEAN member states in pursuing IPEF initiatives. Today›s launch is only the beginning of this conversation. Let us then continue to collaborate and work together towards our shared goals for the region,” Mr. Lopez said.
University of Asia and the Pacific Senior Economist Cid L. Terosa said in an e-mail interview that Philippine participation in IPEF is critical.
“The pillars of the IPEF framework are crucial to the future economic growth and economic development of the country. In particular, supply chain resilience and trade are keys to greater productivity while clean energy and decarbonization as well as tax and anti-corruption are essential for long-run sustainable inclusive economic growth,” Mr. Terosa said.
Mr. Terosa does not expect a rift to develop between the Philippines and major trading partner China as a result.
“The Philippines is still a (prospective) member of the Regional Comprehensive Economic Partnership (RCEP) which includes China. It is more important to clearly define the extent and limits of our participation in the IPEF and other trade frameworks to avoid squabbles with other countries,” Mr. Terosa said.
RCEP involves Australia, China, Japan, South Korea, New Zealand and the 10 members of the ASEAN.
India was supposed to join RCEP but opted out, citing the negative effect of the trade deal on its farmers and workers.
Mr. Terosa added that the IPEF framework implies that the Philippines will benefit from stronger supply chain networks, a more targeted focus on the environmental implications of economic and business activities, and greater attention to current trade-related issues involving the digital economy, emerging technology, labor rules, transparency, and regulatory practices.
“IPEF’s focus on custom-made economic integration is appealing since it recognizes the unique conditions and structural characteristics of participating economies. I believe that the Philippines would benefit more from this,” Mr. Terosa said.
However, Mr. Terosa said that the Philippines should evaluate its preparedness to participate in the agreements to be drafted under IPEF.
“The country needs to build sufficient technical, technological, and institutional capabilities in order to maximize benefits from participation in the IPEF,” Mr. Terosa said.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the participation in IPEF will expand economic cooperation between the Philippines and the US.
“IPEF would create more value-added since this would be moving in the direction of a possible FTA and other economic cooperation with the US, which is the world’s largest economy, one of the country’s biggest trading partners and sources of foreign investment,” he added. — Revin Mikhael D. Ochave
