Senate concurs with Philippines’ RCEP ratification

By Alyssa Nicole O. Tan, Reporter

Philippine senators on Tuesday backed progressively lower tariffs under the world’s largest free trade agreement, covering nearly a third of the global population and about 30% of its global gross domestic product.

With 20 affirmative votes, one negative vote and one abstention, the Senate approved on third and final reading a resolution which gives its concurrence to the ratification of the Regional Comprehensive Economic Partnership (RCEP).

The approval comes more than two years since the Philippines signed the mega-trade deal with 14 other countries — Australia, China, Japan, South Korea, New Zealand and members of the Association of Southeast Asian Nations (ASEAN) in November 2020.

The RCEP was ratified by then-President Rodrigo R. Duterte in September 2021, but the previous Senate did not give its concurrence due to concerns over the deal’s adverse impact on the agriculture sector.

President Ferdinand R. Marcos Jr., who is heads the Agriculture department, had lobbied for the Senate’s urgent approval of the trade deal.

On Tuesday evening, the only senator who voted against the RCEP concurrence is Senator Ana Theresia “Risa” N. Hontiveros-Baraquel, who said she was not convinced that the trade deal would be good for the country, and that the local industries were ready.

“Dapa na po ang ating agrikultura. Hindi pa tayo nakakaahon sa pandemya. (Our agriculture sector is already suffering. We have not recovered from the pandemic.) This is not the time for RCEP. I vote no,” she said.

Senator Maria Imelda “Imee” R. Marcos, the president’s sister, abstained from voting because she believed the deal would not benefit the smaller citizens, citing farmers and those in need.

Before it was approved, senators amended the resolution to include a clause that required that “the Executive department use to the fullest, any exceptions and transition periods available to the Philippines, and not implement any unenforceable RCEP provisions that are detrimental to the Philippines’ interest.”

The Senate will also have to authority to recommend to the President the country’s withdrawal from the agreement.

“That amendment allows the Senate to be more proactive, the initiative or the idea to withdraw comes from us,” Senate Minority Leader Aquilino Martin D. Pimentel III said during the plenary session.

“We are asking him to also seek the concurrence of the Senate, but the decision and the initiative comes from the President,” he added. “

A Senate Special Oversight Committee on the RCEP agreement will also created, headed by the Senate President Pro Tempore. Members will include the Senate Majority and Minority Leaders, and the chairpersons or any designated member of the committees on Foreign Relations; Agriculture, Food and Agrarian Reform; Economic Affairs; Trade, Commerce and Entrepreneurship; Finance; and Ways and Means.

The Senate also amended the resolution to require the establishment of a Public-Private Agriculture Budget Monitoring Committee, as well as the enhancement of transparency in importation monitoring through a dedicated publication list on agricultural goods.

It also required for the Department of Agriculture to provide additional, specific interventions within its banner programs “to address the impact on farmers and fisherfolk who are producing the 15 products enumerated under the 33 tariff lines” and that these take effect before the implementation of the country’s commitments to the agreement.

The tariff lines affect 15 products, mainly fish fillets, frozen mackerel, celery, sausages, olives, spinach, olive oil, live swine, live chicken, black pepper, palm nuts and kernels, preserved sweet corn, chilis and other capers, preserved onions, corn starch, and feed for primates.

Ms. Hontiveros earlier told reporters there were still no efforts to protect the agriculture sector despite the delay.

“The agricultural sector said in the last Congress that they are not ready, we are not prepared agriculturally to really compete on a level playing field. They lamented that since the Senate deferred the decision on RCEP in the last Congress, until now, the preparatory programs and activities they requested have still not been implemented,” she told reporters.

Ms. Hontiveros said the RCEP will be a huge blow to the agricultural sector, adding that there are some doubts if the manufacturing sector will fully benefit as well.

Earlier on Tuesday, Socioeconomic Planning Secretary Arsenio M. Balisacan told a Palace briefing that the country’s accession to the trade deal will address long-standing issues in the agriculture sector and encourage investments.

“It must be ratified,” Mr. Balisacan said. “The future of our country depends so much on our ability to attract investors, particularly foreign capital because the domestic capital is not enough.”

“By being a member, we are saying to the world that we are ready for business, we play the rules of the game well, and your investments are safe with us,” he added.

He also noted that there was “no truth” in claims that the agriculture sector will be hurt by the free trade agreement, noting that the current problems are due to “past neglect.”

“Whether or not there is RCEP, we need to invest in agriculture. We need to address those concerns,” he added.

With the RCEP’s ratification, the Philippines will have no choice but to pay more attention to the agricultural sector to receive the full benefits of the deal, the secretary said.

 

MORE JOBS

The country’s accession to the RCEP is projected to generate 1.4 million jobs by 2031, according to Senate President Juan Miguel F. Zubiri.

Citing a study from the Asian Development Bank, he said that 308,490 jobs in agriculture, 77,683 jobs in industries, and 991,000 in services will be created if the Philippines participates in RCEP.

In a statement on Tuesday, Mr. Zubiri said that the country’s non-participation in the RCEP may lead to a 0.26% decrease in real gross domestic product (GDP).

On the other hand, he said joining RCEP will increase the country’s GDP by 2%.

“If we don’t join the RCEP, investors will go to other countries, because their market is wider. We will be left behind in foreign direct investments. There will be trade diversion,” Mr. Zubiri said.

Meanwhile, Foundation for Economic Freedom (FEF) President Calixto V. Chikiamco told BusinessWorld that the RCEP would improve the investment climate in the Philippines.

“The Philippines is the last among 15 member countries to ratify the treaty…. I think the effect would be immediate in the sense that the Philippines will be back in the radar of investors. While previously, investors may have written off the Philippines, now, the country is back in contention,” he said in a Viber message.

The Makati Business Club said RCEP would help businesses expand abroad, strengthen the economy and accelerate job creation.

“We believe joining RCEP is essential to this as it will comprise 15 countries, 2.1 billion people, and around 30% of global GDP,” it said in a statement on Tuesday.

“While RCEP would help us enter foreign markets, it would also expose our industries to more competition at home. We recognize that there are valid concerns about this. However, we believe that adequate safeguards have been included,” it added.

 

NO TANGIBLE BENEFITS?

The Senate had included several safeguards in Senate Resolution 485, such as the creation of an oversight committee to monitor the RCEP’s implementation. It also included provisions to ensure adequate border inspections and quarantine controls to deter smuggling.

“The guidelines are meaningless, they are mostly existing programs of the DA (Department of Agriculture),” Jayson H. Cainglet, executive director of Samahang Industriya ng Agrikultura (SINAG), told BusinessWorld in a Viber message. 

Mr. Cainglet did not believe “tangible benefits” would come about from the country’s accession.

Similarly, Raul Q. Montemayor, chairman of the Federation of Free Farmers (FFF), said in a Viber message to BusinessWorld that most of the guidelines were based on a listing of the DA’s current programs.

“(These) have not been effective in terms of improving our competitiveness, as evidenced by our increasing agricultural trade deficit of up to $9 billion and slow growth in non-traditional exports beyond banana, pineapple and coconut,” he said.

Mr. Montemayor also described the guidelines as seemingly “recommendatory,” calling for responsible agencies to make commitments instead.

He also expressed doubt that there will be major advantages resulting from the treaty.

“There is very little within the RCEP agreement that cannot be secured from the existing FTAs. All of the projected benefits mentioned by the proponents and their economic advisers are based on assumptions that rarely hold out in the real world,” he said.

Mr. Montemayor said lawmakers who concur with the RCEP should be held accountable should the trade deal adversely impact key sectors.

Earlier on Tuesday, the House of Representatives passed a resolution expressing support for the ratification of the RCEP.