Unity Statement of various people’s organizations and civil society organizations of the People’s Summit — People’s Agenda for Change
February 27, 2023

We reiterate that the recently-ratified Regional Comprehensive Economic Partnership (RCEP), that is disadvantageous and ill-fitting for the Philippine economy, should be junked in favor of prioritizing the strengthening of the domestic economy. No amount of free trade agreements can cure the Philippine economy’s backwardness as long as majority of the people are left behind while only the super rich and big local and foreign businesses gain economically.

The Philippine Senate ratified RCEP as the last Association of Southeast Asian Nations (ASEAN) member to sign the agreement after meeting years of opposition from concerned multi-stakeholders. The comprehensive free trade deal accounts for almost one-third of global gross domestic product (GDP) and a market that covers also one-third of the global population. It purports to aim to bolster cross-border trade and global value chains among member nations – the ASEAN and five its major trading partners Australia, New Zealand, South Korea, China and Japan.

Proponents claim that RCEP could further enhance both Philippine trade and foreign direct investments (FDI) flow as majority of Philippine exports and imports and a significant share of FDI are concentrated or hail from within the RCEP region. Additionally, it is claimed that what can improve for the Philippines are market access for goods and services, export competitiveness, income growth and welfare gains, while reducing trade barriers and trade costs.

Yet the issues that various sectors have raised against the RCEP remain.

  1. Proponents have attempted to argue against the concern that imported agricultural products may harm the local industry, yet particular products may face tariff elimination from one to 15 years under RCEP including feeds for primates, fish fillet, spinach, black pepper, live chicken and live swine, preserved sweet corn, chilies, onions and other capers, celery and frozen mackerel. Meanwhile, many important agricultural products under the Philippine Exclusion List under RCEP are already import-liberalized including rice, sugar, onions, corn, legumes, garlics and coffee.

The agriculture sector’s US$8.9-billion trade deficit in 2021 was the largest in Philippine history and already reached US$8.6 billion in the first three quarters of 2022.

  1. Proponents downplay the matter of lower tariff revenues under RCEP, but a Global Development Policy Center (GDPC) study by Banga, Gallagher & Sharma estimate that the Philippines may lose roughly US$58.2 million in tariff revenues due to RCEP concessions. This is in addition to how much the country is already losing from a highly liberalized goods regime.
  2. Trade deficits in other goods – which was already at a three-year-high of US$43.2 billion in 2021 according to the Senate Economic Planning Office, are also bound to get wider under RCEP. The GDPC study projects that under RCEP the country’s trade deficit could widen by around US$264.0 million.
  3. Proponents claim that RCEP is aligned with Philippine domestic laws hence there would be no need to amend domestic laws for the FTA, but since this clause remains stipulated in the agreement, there is no guarantee that domestic laws will remain intact and not be altered to ensure the interests of RCEP member states, which could be to the detriment of the Filipino.
  4. Advocates further lament that RCEP is silent on labor and environmental standards, which could lead to worse labor rights violations and environmental destruction than already. While the Philippines is party to some labor and environmental agreements and covenants, it should not be forgotten that the country has been cited recently as among the most dangerous for rights defenders including labor rights and environmental defenders.

Which is so because labor rights, environmental, and other economic, social and cultural rights defenders that have consistently raised their voices against the inequalities and injustices perpetrated by Philippine government policies facilitating big local and foreign business interests have been the subject of vilification, harassment, killings, and various other forms of attacks.

These inequalities and injustices worsened by the harsh pandemic lockdowns and from which the country has not risen up despite government claims of recovery include persistent widespread job informality, chronic and unimproved poverty, record-high inflation, unaffordable cost of living, deteriorating social and public services, measly wages and precarious incomes, wanton environmental destruction, and ever-increasing human rights violations. These have stemmed from the Philippine government’s long-standing gross neglect of the country’s economic foundations – agriculture and manufacturing – which are now in their smallest shares of the Philippine economy. This same system has enriched only a few in the country: the World Bank noted that in 2022 the Philippines had the worst inequality and that the country saw the worst increase in the gap between rich and poor.

These, despite the fact that the Philippines has entered into several free trade agreements through the years.

The dire state of the Philippine economy requires a genuinely comprehensive transformational plan that should not include the policies of neoliberal globalization and should instead cater to the overall development of Philippine agriculture and national industrialization that will start the country on the path of inclusive progress.

Today, RCEP essentially imposes on the Filipino nation another layer of globalization mechanisms which have in fact kept the Philippines underdeveloped for so many decades. RCEP and its ratifiers in the Philippines choose to be blind to the details of this underdevelopment and pretend that the country can compete with other better-protected RCEP member economies.

The Philippines will not be better off with RCEP and so this newly-ratified free trade deal must be junked.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s