Is Pangasinan ready for the ASEAN free market?
Uniting for Economic Integration. ASEAN leaders gathered at the 22nd ASEAN Summit in April 2013 in Brunei Darussalam have shown their commitment to achieve the ASEAN Economic Community established in 2003 by enforcing its immediate implementation in 2015. The AEC allows freer flow of business
In a 2003
summit of ASEAN leaders, a vision to finally achieve an integrated economic
market by 2020 resulted in an agreement of establishing the ASEAN Economic
Community (AEC), a unified market and production base operating under a trade
order characterized by a freer flow of goods, ser-vices, investments, capital,
and skilled labor.
Four years
after its institution, leaders of the ASEAN resolved to accelerate the AEC by
2015.
Simply, the
AEC means more doors for opportunities have opened, and even windows are made
conveniently available for a great chance to engage in a market of more than
600 million people all over the region, together with our ASEAN neighbors
Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore,
Thailand, and Vietnam.
Yet, the
seemingly vast possibilities the AEC will bring to businesses are just as overwhelming
as the struggles, especially to our small business owners in the Philippines.
What does
it mean to Philippine MSMEs?
For Micro,
Small and Medium Enterprises (MSMEs) in the country, it means a tighter grip on
the reins. With more than 700,000 businesses in the country, Micro, Small and
Medium Enterprises (MSMEs) represents an astounding 99.6 percent of the statistics,
providing 62 percent of employment to Filipinos, according to NSO-MSMED
Council. Obviously, MSMEs populates the majority of Philippine industry that
when left neglected, enfeebles the bulk of our nation’s work-force and people’s
livelihood.
Although
foreign products, especially Asian goods, can already be found in our common
groceries, a considerable volume of these Oriental products is expected to
penetrate even our small-scale markets with the onset of the ASEAN Economic
Community
For giant conglomerates in the
country, this imminent free trade system is an opportunity to easily expand
their business operations all over the Southeast Asian region.
For MSMEs, this imposes an
undeniable, foreboding indication of a tougher, across-the-board competition.
Recently, several distinguished corporate entities like Moody’s Investors
Service promoted the Philippines into a higher investment standing, placing the
country among the highest in the Asia-Pacific.
However, these recognitions do
not save minor entrepreneurs in the country from the looming deadline of the
AEC in 2015, nor ensure an upbeat chance for MSMEs to endure the intra-regional
contest.
Can Philippine MSMEs compete?
“They (Philippine MSMEs) can’t.
All of our neighbors have solved these problems. Their SMEs are now the
back-bone of their industries. Here, SMEs are struggling. The attrition rates
in the Philippine SMEs especially among the exporters are tremendous.
Now if you’re looking at SMEs,
franchise businesses are doing fine – they have an 85-percent survival rate and
they can compete. But other than that, especially in places outside Metro Manila,
no way (for SMEs to compete,” Philippine Chamber of Commerce and Industry
(PCCI) honorary chairman and treasurer Sergio Ortiz-Luis Jr., admit-ted.
He further pointed out that
“Philippine SMEs are hobbled by constraints like lack of access to financing,
antiquated labor laws, challenging business environment, and for those that
export, even the strong peso.”
How about Pangasinan MSMEs?
Probably. Notwithstanding the
province’s current economic status and in-vestment plans which are highly reflected
in development projects and people-centered programs, the fighting chance of
our local MSMEs in Pangasinan is just as slim and limited like any other in the
country.
Beforehand, Ortiz-Luis has
already depicted Philippine MSMEs as incompetent when it comes to struggling
un-der an intra-regional business setting set by the AEC. All the more so for
MSMEs in the provincial markets. This, however does not mean demise of
Philippine MSMEs. Actually, there are clear hopes to cope with the co-ing of
AEC, ‘simple adjustments’ as PCCI Vice President for Promotions Leonore Diokno
Abella exclaimed. These ‘simple adjustments that she mentioned “can make all
the difference” to MSMEs.
Standing a good, fighting
chance
In an interview printed in the
March 2013 edition of business magazine Entrepreneur, PCCI VP for
Promo-tions Leonore Diokno Abella pro-posed some five “doable” steps that MSMEs
can follow to prevail the impending AEC competition.
►Improve and simplify. “SMEs preparedness can come by improving the system.
Perhaps there are many steps to make a product, but there are ways to simplify,
lessen costs of operations. That’s the only way. They could also think of
alternative raw materials. And they have to be cost-conscious,” Abella explains
to Entrepreneur.
►Give what the market
wants. “They should anticipate (what the market wants). For
example, they should think of what’s happening in the world. Homes are getting
smaller.
People are getting health conscious.
They should know about these things. They should tailor their products to what
the market wants.”
►Track trends. Abella mentions the shampoo packaging revolution
that is popular even in rich countries. They’ve learned to downsize, she says.
“Exporters have to understand that it’s not business as usual that people buy
in bulk. Before, the Americans, the Europeans they ordered a lot. Not anymore.
The orders are becoming smaller.”
►Control costs. She adds that enterprises should improve employee
productivity through trainings. “It’s all about continuing cost control,”
Abella says by citing the big chance of being hired of workers who are mindful
of the businesses’ resources applying in a home décor company.
►Get help. SMEs
should also take advantage of government programs that help businesses improve
their operations, she says. Businesses can also get assistance from the
government in improving their workflow, the layout of their factory, even the
use of raw material or even packaging, Abella went on.
The problem with such types of
pro-grams is that the government may not be doing enough to promote them, she
concedes. “Hindi siguro sexy magpromote ang government ng programs nila.
They have to make it sexy.” Government should also do more in promoting
exports, she says.
For possible funding sources
that can help business in the country, Abella pointed out two government
financial institutions – Philippine Export-Import Credit Agency and Small
Business Corporation – which lend fiscal resource to associations, which then
lend to their members.
The 2015 deadline
As detailed in the AEC Fact
Book, the goal of establishing an ASEAN Community is set by the year 2020, and
the realization of this is through the foundation of its fundamental three (3)
pillars: the ASEAN Political-Security Community, ASEAN Economic Community and
ASEAN Socio-Cultural Community.
In order to “transform ASEAN
into a region with free movement of goods, services, investment skilled labour,
and freer flow of capital,” the AEC is set to be accomplished in 2015.
But according to business
leaders at the 6th ASEAN & Asia Forum, AEC is still a long way off
and that a real ASEAN economic integration must ensure a seamless, cross-border
trade and investment. (Channel News Asia)
In the global economic
community, US Chamber of Commerce and AmCham Singapore launched the ASEAN Business
Outlook Survey on August 2013, with US companies preparing strategies patterned
on ASEAN’s plans to diminish trade barriers for goods, services, and investment
among the member countries towards economic integration. The highlights of
which were discussed at the ASEAN Business and Investment Summit in Brunei
Darussalam in the same month.
The presentation of the survey
high-lights in the Brunei Summit involved the polling of 475 senior executives
representing US companies in all ten (10) ASEAN countries on whether the AEC
will really meet its deadline in 2015.
In the survey results, 52%
thinks that this goal (ASEAN Economic integration) will not be in place by 2015
while 23% percent of the respondents are certain it will be realized by the
scheduled dead-line, and the remaining stood neutral.
Gleaning from these survey
results, it appears that the 2015 goal of the AEC will only serve as
preparation for the coming years of adaptation to the set-ting of the
much-awaited economic integration.
Nonetheless, the ASEAN Economic
Community is inevitable, hence MSMEs and the entire Philippine industry have
only one thing to do: PREPARE.
.JPG)
.JPG)
