Latest Stories

Asean interconnectivity deal eyed


MANILA, Philippines—The government is set to negotiate a key free trade and interconnectivity deal at the Association of Southeast Asian Nations Summit in Cambodia this week.

The deal is expected to give a significant boost to the country’s manufacturing sector.

Transportation and Communication Secretary Mar Roxas II said he would lead the negotiations for an interconnectivity deal among the 10 member-countries of the Asean.

If approved, the deal will allow the tariff-free cross-border movement of raw materials from one country to another for assembly.

“For instance, we can import tax free raw materials from different countries and have it assembled into finished products here for reexport to the original country,” Roxas said in an interview. “This is just like moving products from one economic zone to another,” said Roxas, who accompanied President Benigno Aquino to Cambodia.

These raw materials would be allowed to enter and leave the country without value-added taxes and import duties.

He said such a deal would allow the country to get more work for thousands of workers in the manufacturing sector.

Roxas said the priority would be to sign a deal between countries in the Brunei-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA). He said similar deal with China was also in the works.

“Believe it or not, we are more productive compared to China,” Roxas said. While salaries in the Philippines and China may be at similar levels, the higher quality of work in the country means companies get more for every dollar they spend here.

One challenge for the country, he said, was the power rates, which are considered the highest in the Asean.

“Our advantage is in industries that use less power such as garments,” said Roxas. He also said that because of the country’s high quality of work, companies have been known to be willing to pay a premium.

One area in the Asean interconnectivity deal that remains unresolved is the issue on whether “prime movers” or trucks will be allowed to accompany their cargo when being shipped from one country to another.

The Philippines’ position, Roxas said, was to allow only container vans and chassis to enter the Philippines. The cargo would be brought to factories by Philippine-registered trucks.

Latest government data showed that the country’s manufacturing output, by value, grew by 2.6 percent in January, bouncing back from a decline of 6.2 percent in December.

In contrast, Malaysia’s factory output slowed to a growth of 0.2 percent in the same month after rising by 2.9 percent the month before. Thailand’s manufacturing output rose 3.7 percent, better than a 3.4 percent decline last December.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: ASEAN , Interconnectivity , Manufacturing , trade

  • TrentonWoods

    I like this strategy.  This is the better way except for power cost which is very high.  We are far better than China in terms of quality output but we lack the raw materials and machinery.  If only government will support us on capital machinery and raw materials. Our people would not be treated slaves abroad.

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Tagle: Christ’s resurrection a message of hope to faithful
  • Aquino vows to intensify anti-corruption drive further
  • Unease in Vatican over cardinal’s luxury flat—report
  • Nepal calls off search for missing guides on Everest—official
  • Pope’s Easter Message ‘Urbi et Orbi’
  • Sports

  • Rain or Shine grabs No.4, sends Ginebra to 8th
  • Red-hot Alaska rips injury-depleted San Mig Coffee
  • Pacquiao courtesy call to Aquino set for Monday
  • Nick Calathes suspension a reminder of supplement risk
  • Teague scores 28 as Hawks soar past Pacers in Game 1
  • Lifestyle

  • Angono petroglyphs in danger of disappearing
  • Britain’s baby Prince George visits Australian zoo
  • Noli Yamsuan, Cardinal Sin’s ‘official’ photographer: ‘I could smell the aftershave lotion of the Pope’
  • Simplifying and lightening life
  • Where to go for Easter night-out
  • Entertainment

  • Show-biz celebrities’ other choices of summer getaway
  • Why ‘Noah’ can’t dock his ark at Philippine theaters
  • Acclaimed artist goes wild while on holiday
  • Believing in this mermaid
  • Missing Xian
  • Business

  • Top-selling insurance agent opens her dream café
  • Connecting and transacting with one another
  • Building wealth for health
  • Why Mandaue Foam buys, rather than rents, space
  • A workplace of new possibilities
  • Technology

  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Opinion

  • Epiphany
  • Unpaid creditor vs distressed debtor
  • Moving on
  • From culinary desert to paradise
  • Response to China: ‘Usjaphil’
  • Global Nation

  • Tim Tebow’s charity hospital in Davao seen to open in 7 months
  • OFW died of Mers-CoV in Saudi Arabia, says family
  • Aquino, Obama to tackle US pivot to Asia during state visit
  • Asia seeks Obama’s assurance in territorial spats
  • Cesar Chavez movie sparks memories of Fil-Am labor leaders
  • Marketplace