BSP BACKS REGIONAL ECO INTEGRATION OF ASIA-PACIFIC COUNTRIES

MANILA, November 5, 2005
 (STAR) By Ted P. Torres - The Bangko Sentral ng Pilipinas (BSP) is endorsing a regional economic integration scheme but has expressed reservations on the proposed single currrency for the Asia Pacific region. Regional integration is viewed as a process that will hasten trade and investments within the region.

"It is progressive, and it is actually progressing," said BSP Governor Amando M. Tetangco Jr.

He cited ongoing trade agreements among Association of Southeast Asian Nations (ASEAN) members which expanded to include China, Japan and South Korea, otherwise known as ASEAN +3. The original ASEAN members are Indonesia, Malaysia, Thailand, Singapore, Brunei, and the Philippines. He said regional integration has resulted in more and frequent discussions between different policymakers involving economic policies. Other discussions are centered on intensifying cross-border infrastructure building and the associated coordination of laws, rules and regulation across the region.

It also involves trade integration and economic surveillance mechanism, coordinated reforms in the regional banking system, the local currency bond market and individual member nations, and promoting a regional exchange rate arrangement for the region.

"There will be more coordinated response to different developments like tragedy, financial changes, and global issues like oil prices," Tetangco said.

However, the BSP official expressed concerns in moving towards a single currency system similar to the euro. "It will require more than what has already been achieved today. It needs greater convergence of policy issues, particularly economic and financial policies. For the regulator, it will require a lot of hard work, cooperation and political will for each nation in the region. It took Europe some 50 years and to think that the variance was not as great as it seems to be like Asia, not to mention the physical and cultural constraints," Tetangco said.

Meanwhile, HSBC Philippines chief executive officer Warner Manning said that to achieve regional integration, all the nations must want it, and must have the political will for it. "Their economic performances must be moving forward in some coordinated manner," he said.

Recently, Asian Development Bank (ADB) president Haruhiko Kuroda called on Asian nations to seriously work towards regional integration. "Regional economic integration holds out the promise for achieving a poverty-free, prosperous, and peaceful Asia," Kuroda said in a recent forum in Manila. "Asia’s long-term objective should be monetary union with a single currency."

But he added it is important to ensure that Asia’s regional integration is not at the expense of its continued engagement with the rest of the world. "Our objective should be not to create a ‘fortress Asia,’ but a highly integrated Asia that is open to the rest of the world as well," he added. "This is ‘open regionalism.’ In short, Asia should increasingly act regionally while continuing to think globally." Kurada said.

Asia could experiment with a model of regional economic integration with minimum political compromises across countries, he said. "Unlike in Europe, there may be much more we can do in Asia following this route," Kuroda said. "Perhaps Asia should therefore draw important lessons from Europe but ultimately carve out its own model of economic integration."

Garment exports up 2% to $1.676B in January-August By Marianne V. Go The Philippine Star 11/05/2005

The country’s exports of garments and textiles amounted to $1.676 billion in the firs eight months this year, posting a slight growth of two percent compared to $1.639 billion in the same period a year ealier, the Garments and Textile Export Board (GTEB) said. In terms of value, exports to the United States remained the highest, amounting to $1.233 billion and accounting for 74 percent of total garments and textiles export receipts.

However, compared to garments and textile exports from January to August last year of $1.282 billion, exports to the US posted a decline of four percent. In contrast, exports to the European Union posted a 30-percent growth from $174.606 million to $227.5 million this year. Likewise, exports to other countries posted a healthy growth of 26 percent from $131.72 million last year to $166.416 million this year.

Exports to Canada, like in the US, posted a slight decline of two percent with total exports this year amounting to $49.018 million compared to P49.645 million a year ago.

Garments and textile associations and labor unions have been urging the Arroyo government to act with urgency on the sector’s request for a government-to-government talk on a sector-specific preferential tariff agreement with the United States and the European Union. Confederation of Garments Exporters of the Philippines (Congep) chairman Donald Dee warned that failure to act immediately within the next six months could marginalize Philippine garments and result in foreign currency losses of up to P1.5 billion.

Congep, along with the Garments Business Association of the Philippines (GBAP), Textile Mills Association of the Philippines (TMAP), Foreign Buyers Association of the Philippines (FOBAP), the Associated Labor Union-Trade Union Congress of the Philippines (ALU-TUCP), National Confederation of Labor (NCL) and Alyansa ng mga Manggagawa sa Garments at Textiles, appealed for speedy action on the request before half of industry’s workforce or 200,000 workers lose their jobs.

Congep had formally asked the government, through the Department of Trade and Industry, to help pay for the services of a US lobby group to promote the Philippines’ interest in securing a sector-specific preferential tariff agreement. Dee also clarified that the preferential tariff agreement is sector-specific and would not involve the more complex and comprehensive free trade agreement.

He reiterated that the garments and textile market is very competitive and the Philippines’ failure to respond immediately could result in buyers pulling out their order and giving them to competitors like China and Sri Lanka which are more competitive because of their cheaper labor.


Chief News Editor: Sol Jose Vanzi

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