RCEP to boost FDIs to PH, HSBC report

The Philippines is expected to benefit from the ratification of the Regional Comprehensive Economic Partnership (RCEP) initially through higher foreign direct investments (FDIs), a report by banking giant HSBC said.

According to a report by HSBC Global Research dated Feb. 23, despite the more than a year delay in the RCEP ratification by the Senate which approved the measure last Feb. 22, “the RCEP will help the Philippines attract the FDI needed to boost exports and incomes in the years ahead.” the trade deal came into force in January last year, only 11 of the 15 countries joined immediately.

It said South Korea and Malaysia took part only after two months while Indonesia joined in August 2022.

The report said the Philippines’ entry was late due to issues on agriculture.

2023, further limiting available oil supply globally.

Meanwhile, preliminary US oil inventory data from the American Petroleum Institute showed an increase of 9.8 million barrels, against expectations of a 1.2 million-barrel rise.

A build in inventory data points to lower demand in the country, limiting overall oil price increases.

Markets are awaiting official inventory data from the US Energy Information Administration, due later in the day. (Anadolu)

RCEP, a trade deal between the Association of Southeast Asian Nations (ASEAN) and five other major countries namely Australia, mainland China, Japan, New Zealand and South Korea that took effect in January 2022, removes tariffs on 90 percent of goods traded within the bloc.

It also provides a 40 percent “rules of origin”, or allows businesses to qualify for a trade preference so long as stakeholders’ inputs come from within the membership of the block.

The report said while

Citing reports quoting the Department of Trade and Industry (DTI), the HSBC report said the country “only offered 33 agricultural tariff lines for further liberalization or improvement” which “is only equivalent to 1.9 percent of the total agricultural tariff lines.”

Amidst this, the report said the trade deal is expected to boost FDIs to the Philippines but only after the implementation of several structural reforms, such as better implementation of the Ease of Doing Business Law, lower energy prices and a Charter change on foreign ownership.

It said “competitiveness in attracting FDI is a crucial issue in 2023 with ‘supply-chain relocation’ as the hot topic in ASEAN today.”