By Daryll Edisonn D. Saclag

Reforms, expansion urged ahead of AEC

Posted on September 12, 2013

THE PHILIPPINES will be able to fully enjoy the benefits of the planned ASEAN Economic Community (AEC) 2015 if the government simplifies doing business and if companies internationalize, two economists yesterday said.

TAC Applied Economic and Financial Research Chief Executive Officer Thierry Apoteker speaks at the Management Association of the Philippines forum in this Sept. 10 photo. -- Jonathan L. Cellona
“The AEC will be highly beneficial for the Philippines, provided two conditions are met: administrative reforms and corporate strategies,” Thierry Apoteker, chief executive officer of TAC Applied Economic and Financial Research, said in an interview yesterday.

The AEC calls for the ten-nation Association of Southeast Asian Nations’ (ASEAN) transformation into a single market and production base with the free movement of goods, services, labor and capital.

Mr. Apoteker said that the AEC will provide a bigger market for the Philippines and encourage more investments and job creation.

However, he said that other ASEAN members have business environments that are more attractive than that of the Philippines. This, he noted, should serve as a motivation for the country to implement reforms.

“Doing business in Thailand, Indonesia, and even Vietnam, is much easier than the Philippines. It will only take you a few days to start and close a business. How long does it take in the Philippines? Very long,” Mr. Apoteker said.

Thierry Da, TAC senior advisor for Asia, shared the same sentiment and said: “The less administrative steps you have to go through, the less open you are for corruption. Simplify steps for business registration. Remove complexity where you can.”

“There is a sense of urgency in implementing reforms since AEC is only two years away. It cannot be done overnight, but it can be done if there is a clear policy direction. If government will do this, the Philippines will be competitive,” Mr. Apoteker said.

As for the expected bigger market for the Philippines, he said: “And with a bigger market comes stiffer competition.”

For businesses to survive in such a competitive environment, Mr. Apoteker noted, they must know their competitive advantage and their market.

“Majority of Filipino companies are still obsessed with the domestic market. They have not looked at expanding beyond the Philippines. They do not know their competitive advantage and do not develop internationalization strategies,” he said.

Mr. Apoteker said that a Filipino company can either partner with another Southeast Asian firm or produce locally in that country.

“The Philippine is ready for AEC, but it will be better if these two conditions are met,” he said.

The ASEAN is composed of the Philippines, Malaysia, Singapore, Indonesia, Thailand, Brunei, Vietnam, Lao PDR, Cambodia, and Myanmar.