PHL sets sights on includive growth from free trade deals

The government will put more teeth on initiatives, including education drives and linking small- and medium-scale enterprises (SMEs) to trade chains, to make free trade agreement (FTA) benefits trickle down to the grassroots, an official said Tuesday night.

Big corporations are mostly the ones that benefit from free trade agreements, Trade Undersecretary Adrian Cristobal told a forum on the Asia-Pacific Trade and Investment Report (APTIR) 2013 at the UP School of Economics (UPSE).

“There is a need for these [FTAs] to be reached by other, smaller businesses,” so they can expand and generate jobs, the Trade official said.

The APTIR is a publication of the United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP).

Citing results of the APTIR 2013, UN-ESCAP trade policy and analysis chief Mia Mikic said via webcast that the region, including the Philippines, needs to “move towards inclusive trade and investment that benefits all.”

This entails trade facilitation measures, SME development and encouraging corporate social responsibility in businesses, said Mikic.

In an interview after the forum, Cristobal told reporters that the Department of Trade and Industry (DTI) will ramp up its Doing Business in Free Trade Areas (DBFTA) – a massive information session on the Philippines’ current FTAs.

Last year, government held 125 DBFTA sessions all over the country, a quarter more than the 100 in 2012. Cristobal said they aim “to match… or exceed the 125 in 2013.”

The DTI will tap social media, develop its website and forge more tie-ups with universities for the information drive, he added.

“The department itself will have to improve on providing ground-level brokering services, meaning to broker suppliers to exporters and importers,” Cristobal said.

Inclusive business plan

DTI is studying how to integrate the inclusive business model into the 2014 Investment Priorities Plan (IPP), which could be out this quarter.

“We’re institutionalizing means to promote the inclusive business model. The Board of Investments is looking at that as one of the conditions in granting incentives to business,” said Cristobal.

The inclusive model is a business plan that benefits low-income communities by including them in a company’s supply chain as producers, entrepreneurs or employees.

But much of the bottlenecks in linking SMEs to trade chains are structural in nature, like the Philippines’ decrepit infrastructure system, an economist said.

UPSE professor Ramon Clarete said the Philippines also needs to develop its infrastructure and agriculture industry, apart from facilitating international trade and investment, in order to attain inclusive growth and poverty reduction

“We need better infrastructure, investments in IT infrastructure, among others. I’ve seen a lot of investments in agriculture falter, and it’s not good,” said Clarete, who is also executive director at the Philippine Center for Economic Development. – VS, GMA News