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Ratifying the Regional Comprehensive Economic Partnership (RCEP): What’s in Store for the Philippines

As one of the signatories, the Philippines is expected to ratify the Regional Comprehensive Economic Partnership (RCEP) Agreement through Congress, specifically the Upper House or the Senate. As opinions vary on whether individual member countries stand to benefit from RCEP, there is a need to assess if the Agreement has the potential to benefit the Philippines in terms of trade and investments. This paper presents the topics included in the recently concluded RCEP Agreement, describes the economic linkages between the Philippines and its member states, examines the expected implications for the Philippines, and attempts to determine the possible steps the Philippines should take in order to maximize the gains from RCEP. Current data on Philippine trade and investments with RCEP member economies and related literature show that the Philippines will have minimal gains in being a member of the RCEP as the balance of trade with RCEP countries are expected to deteriorate and the bulk of current investments still comes from Japan and traditional non-RCEP economies such as the US and EU. However, given RCEP’s wider geographic coverage, the possibility of cumulation within RCEP if commitments to common/harmonized rules of origin for all goods traded in the region will be implemented has the potential to increase the Philippines’ trade and investments given the country’s moderately high global value chain participation, especially in medium- and high technology manufacturing sector. Maximizing the gains from RCEP, however, will depend on the country’s ability to address supply-side constraints such as high administrative and compliance costs, infrastructure constraints, governance concerns, and market entry restrictions.


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