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Economist highlights keys to Phl growth

While the Philippines has made impressive strides in the global economic outlook, much more still needs to be accomplished in order to propel the country into firmer footing for the long-term period.

Among the country’s biggest economic pluses has been its reliance on the Asean region as its biggest trading partner, thereby spurring more economic activity within the region. This was according to statements released by the Philippine Statistics Authority, and the Bangko Sentral ng Philippines, which outlined six other powerful entities, including Russia.

According to Dr. Cielito Habito, chief of party, USAID TRADE, trading relationships within the Asean/AEC region are increasingly complementary rather than competitive since trade protection can be self-penalizing.

This is so since zero tariff rates are quite common nowadays among many countries to encourage free-flowing trade minus the rigid restrictions that inhibit the process.

“Trade in the region is likewise intra-industry in nature in the sense that the member nations trade in products within the same industries such as electronics, vehicles, and chemicals,” he added during the BSP Competitiveness Seminar held at an uptown hotel in Cebu.

Habito also pointed out certain processes that have somewhat succeeded to facilitate the free flow of trade in the region. First is trade and investment liberalization, which builds inherent competitiveness, widens scope for growth, and increased competition makes all consumers better off.

“The ‘Open Skies’ policy fosters tourism jobs and earnings with strong inter-industry linkages and multiplier effects,” said Habito

However, in the Philippine setting,” pocket open skies seem more applicable since many foreign airline companies refuse to grant equal access to the Philippines for one reason or another.

The Competition Law also curbs monopolistic and oligopolistic behavior, leveling the field for Small and Medium Enterprises (SMEs) toward more inclusive growth.

The speaker likewise enumerated imperatives that would pave the groundwork for imperative growth as he batted for coordinated Micro and SMEs promotion and support by way of invigorating and improving the MSME Development Councils.

Habito also suggested the Philippine Competitive Commission do its job in promoting wider competition and market contestability.

“We also need to foster inclusive business by way of encouraging inclusive value chains vs. vertical integration—aside from investing in the Filipino so he would perform better against his regional counterparts for a truly level playing field,” he added.