How will the Philippines brace itself for One ASEAN 2015?

The Philippines is experiencing a construction boom. With a 7% growth in our economy more and more of our citizens are finding it easier to afford a place to call their own. The towering commercial and residential high rises in Makati, Taguig, Ortigas, Libis, Cubao CBDs are a picture of a robust and growing economy.

The outlying areas of Laguna, Cavite, Batangas, and Pampanga are also on the rise as more and more residential communities are being developed. Major property developers like Ayala land, Robinsons land, Megaworld, SM land, Rockwell Land, Federal Land, Eton Properties, Century Properties, etc. are aggressively focused on community development, integrating and consolidating residential properties with commercial spaces to create a one-stop shop for their buyers. 

According business circles, aside from our strong growth, these developers are bracing themselves for the 2015 ASEAN integration. Some Businessmen and politicians are pushing for policies to make the Philippines a part of this.

What is the One ASEAN Economic Community?

The One ASEAN Economic Community is a program the Asean leaders adopted. The AEC Blueprint was agreed upon on November 2007, with the vision to “establish by 2015 a highly competitive single market and production base for its ten member economies, that promotes their equitable economic development and facilitates their integration with the global community.”

What are the PROS?

The ASEAN Economic Community (AEC) will open FREE TRADE within its member countries. Free Trade means taxes and tariffs on import and export products will have prices based solely on the law of supply and demand, these taxes and tariffs will not affect the prices of the goods traded.

With AEC, professionals will be in high demand in our neighboring countries because of our outstanding work ethic and our ability to speak English. Professional Engineers, nurses etc. will have greater career opportunities in these nations. 

This common market will attract investors into the region. With the AEC’s growth of 5.4% (greater that India’s 4%) foreign investors will be coming in droves to be able to part of the action. Investments from other countries will drive our local economy, better economy, better internal development (infrastructure and services) (but if corruption remains well…)

Finally for all our Small and Medium Enterprises (SMEs), their customer reach has just reached a whopping 600 Million! With the ability to franchise and expand their business system, our SMEs have an amazing room for growth and profitability.

What are the CONS?

With the troubled economies around, our own growth may be delayed due to the fact that our own market will have to support these other markets. Indonesia’s current state is a major question. Will this be a repeat of the European Union Crisis? (our difference is, in AEC there will be no common currency)

Prices of land here in our country, could possibly rise to 300%, if congress creates laws that will  allow foreign companies to purchase land here. Even our local banks BDO and BPI are unsure of what will be the effect on their business once the banks from these countries are allowed here. So the capability of our local banks to provide loans is still in unsure.

How will our local agriculture cope with the flooding of very cheap produce from our neighboring countries? We’ve seen the current state of local agriculture. The plight of our local farmers and the control of big farm land to a few have prevented us from fully realizing the full potential of our agriculture.

Finally our underdeveloped domestic businesses, manufacturing industry, and labor sector may not be ready for this integration with these industries far cheaper in our neighboring countries. With cheap labor surplus in these other AEC countries, has our own government prepared for the effects? What are their policies and contingencies for this event?

In a nutshell:

PROS	CONS
Free flow of goods, services, capital, investment, and skilled labour (FREE TRADE)	Our still growing  market economy will have to support troubled economies like Indonesia’s and other poor ASEAN economies (a possible repeat of the European UNION Crisis?) (http://www.mangunonmarkets.com/)
Better career opportunities for professional level citizens (especially for professional engineers)	Prices of land (properties in general) here in the Philippines is expected to grow by as much as 300%
Create a common market for foreign investors to invest in	our AGRICULTURAL SECTOR will greatly lose out on cheaper produce from our ASEAN neighbors (another blog to be discussed here on Stainonpaper)
More opportunities for Small and Medium Enterprises to venture abroad and cater to 600 MILLION customers	our UNDERDEVELOPED domestic businesses, manufacturing industry and labor sector might not be ready to compete (another blog to be discussed here on stainonpaper)

Do you think our country is ready for this?