Chua presses RCEP approval this week
The Philippines could secure goods—especially food, but also nonfood products—that are in short supply or not produced locally by joining the Regional Comprehensive Economic Partnership (RCEP) of the Association of Southeast Asian Nations (Asean) and five partner-countries, as the war in Ukraine continued to disrupt the global supply chain, according to Economic Planning Secretary Karl Chua.
Chua said in a statement that Philippine agriculture could further improve with the help of the RCEP along with continuing efforts to fix structural issues in the sector, referring to policies and laws intended to boost productivity and output growth.
RCEP is a free-trade agreement among the 10 members of the Jakarta-based Asean—the Philippines, Indonesia, Thailand, Malaysia, Singapore, Cambodia, Laos, Myanmar, Vietnam and Brunei—with China, Japan, South Korea, Australia, and New Zealand.
Chua noted that these countries cover about half of the Philippines’ export markets and two-thirds of the country’s sources of imports.
“The economic team has pushed for the passage of three liberalization laws that will bring in a lot of foreign direct investments,” he said. “But if we limit our intervention by not joining RCEP, then we will not reap the full benefits of all the reforms that we have pushed and are pushing for.”
The economist said the Philippines would lose out on so many other opportunities by not joining RCEP.
“Today, countries are looking for the next best source of agricultural and non-agricultural products because of the Russia-Ukraine conflict,” Chua said. “Time is of the essence, and we do not have time to waste.”
President Duterte already ratified the RCEP agreement on Sept. 2, 2021, but it still requires the approval of the Senate as required under the Philippine Constitution.
“We hope the Senate will urgently ratify the RCEP this week, given its urgency and large benefits to the country,” Chua said.
Chua reiterated the call for the Philippines to join the RCEP amid reports that several food companies are asking for customers’ patience amid dwindling stocks of condiments for chicken meals, large servings of French fries, and flour used to make donuts and ensaymadas.
Last week, the United Nations-supervised Agricultural Market Information System (Amis) warned that the volatility of food prices is expected to be high as long as the war in Ukraine continues.
Still, the Italy-based Amis said that while prices were rising sharply, there was no food crisis yet.
“While we are used to the vagaries of weather in agriculture, unlike drought or flooding, the impacts of the war could last well beyond the current crop year, and thus create significant uncertainty that will roil commodity markets,” the agency said.
The Russian invasion of Ukraine, which started last Feb. 24, has triggered surges in prices of petroleum products as well as fertilizer that spread out across other commodities, especially foodstuff.
The Amis said that despite the turmoil and volatility, markets are so far functioning well and importers are finding alternative supplies, albeit at higher prices.
“Producers should respond and expand production, but this will take time, and high fertilizer prices and adverse weather events could constrain and further delay the process,” the Amis said.