THE PHILIPPINES fell behind in economic integration in Asia-PacificIfc region because it recorded the worst performance index measuring 17 economies » performance in 2019.
The Pacific Economic Cooperation Council (PECC) in its 2021-2022 State of the Region Report released on Monday said the Philippines’ integration performance “still has the largest deviation from the regional average, and its convergence ranking remains the lowest among the 17 economies in 2015 and 2019.”
The index measures the degree of economic integration in the region based on trade in goods, investment and tourism. It also measures the convergence of gross domestic product (GDP) per capita, the share of non-agricultural activities in GDP, the rate of urban residents, life expectancy and the share of education expenditure in gross national income.
“The process of economic integration is generally defined as the freer intra-regional movement of goods, services, labor and capital across borders,” the PECC said.
The Philippines scored -11.35 in the composite index, behind the regional average of 15.61.
The report says the rankings should not be read as league tables, as lower rankings may imply that an economy is more globally oriented than regionally oriented.
Recent IfFigures show increasing integration indicating more frequent exchange of goods, capital and people between some Asia-Pacific economiesIfvs.
Singapore, Hong Kong, Thailand, Vietnam and Korea performed best in the 2019 index.
“As the freest business ports, Singapore and Hong Kong (China) benefit the most from economic integration in trade, investment and tourism,” PECC said.
The PECC said intra-regional trade flows have improved between some economies, including the Philippines.
“Compared to 2015, in 2019, only six of the 17 economies included show an increase in their intra-regional trade shares: the Philippines, Vietnam, Mexico, Canada, Australia and New Zealand,” said he declared.
“Meanwhile, major trading economies, such as China, the United States, Japan, and Korea, experienced sizeable declines, which mostly occurred in 2018 and 2019.”
Rizal Commercial Banking Corp. chief economist Michael L. Ricafort said the Philippines’ relatively weak integration may in part have been caused by restrictions on foreign ownership preventing the country’s regulations from aligning with the region.
“There are also some constraints to further integration of Iffinancial markets such as the need to further harmonize Iffinancial market/banking regulations“, he said in a Viber message.
“Competitiveness (is) also relatively lower, such as the ease of doing business compared to other countries.”
UnionBank of the Philippines chief economist Ruben Carlo O. Asuncion said the Philippines is more integrated into the Association of Southeast Asian Nations (ASEAN) than before.
“If we have indeed fallen behind, then this is the most wonderful opportunity to improve integration efforts (because there is literature affirming the impact of economic integration on economic growth),” he said. he said on Viber.
“This saying ‘falling behind’ should be known and heard by our candidates (for the presidency) so that they know how to help the country and integrate it into their respective platforms.” — Jenina P. Ibanez