ADB, AMRO warn PH, ASEAN still vulnerable to economic 'scarring'

Warren de Guzman, ABS-CBN News

Posted at May 13 2022 10:49 PM

Makati Business district ABS-CBN News/File
Makati Business district, April 23, 2018. Jonathan Cellona, ABS-CBN News/File

ADB, AMRO recommends accession to RCEP

MANILA— Experts believe the Regional Comprehensive Economic Partnership (RCEP), as well as the resumption of all face-to-face schooling, are keys to a more inclusive economic recovery from the COVID-19 pandemic.

Marthe Hinojales, economist for regional surveillance at ASEAN Plus 3 Macroeconomic Research Office (AMRO) said the longer schools stay closed, the more likely each country will have human resource problems down the line. 

The Philippines, which has kept face-to-face learning closed for 2 years running, was included as one of the ASEAN members who will likely face this issue. Also mentioned were Myanmar, Cambodia, and Malaysia. 

Hinojales noted that coupled with higher unemployment and lower labor force participation rates, the Philippines could be headed for lower labor force productivity in the future.

Meanwhile, the RCEP, an agreement between the 10 members of ASEAN, China, Japan, South Korea, New Zealand, and Australia, is seen as a catalyst for greater regional integration. 

Lei Lei Song, director for the economic research and regional cooperation department of the Asian Development Bank, said if countries have not yet ratified their participation in RCEP, they are liable to get left behind, particularly in the technology space. 

He used the establishment of "unicorns" or tech start-ups with valuations of at least $1 billion in the region. 

“The number of unicorns, I think ASEAN has about a dozen. India, actually crossed 100 unicorns," he said.

“It is telling. The future will depend on technology, and the tech race is ongoing, it will be more important. Digital as well as green technology."

Vietnamese National Center for Socio-Economic Information and Forecast director Toan Thang Tran said RCEP will not likely have much of an impact or material gain for them when it comes to tariff reductions and whatnot. 

However, he does see a clear advantage in terms of access to technology, and the overall RCEP supply chain and ecosystem. 

"RCEP will reshape the supply chain, the value chain in RCEP very much. From the Vietnamese perspective, we do not expect very much from tariff reduction," he said.

ADB Southeast Asia senior economist James Villafuerte, meanwhile, said technology and education will be quite important for the recovery of the region, as well as each nation within ASEAN and even RCEP. 

He believes the digital literacy gap needs to be addressed to ensure an equitable and inclusive recovery. 

“The most important thing for digital literacy is first providing access to smart devices for both kids, especially in the schooling age, as well as for workers. The second is also rolling out the new modes of education, especially for online training, and a precursor for widespread learning is an investment in telecoms," he said.

Congress has yet to ratify the country’s participation in RCEP, but it has a chance to do so when session resumes for the final time before the new government comes in. 

Socioeconomic Planning Secretary Karl Chua earlier said they will try to push for this measure during that short window.

Chua has also been pushing for the resumption of 100 percent face-to-face classes. 

The National Economic and Development Authority estimates tens of trillions of pesos in productivity and wages will be lost over the lifetimes of students affected by the COVID-19 school closures, and has urged that classes must resume as soon as possible.

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