Concluding remarks by the Chairperson

1. This fourth Trade Policy Review of the Philippines has provided us with an excellent opportunity to improve our understanding of the Philippines’ trade and trade-related policies and practices and how they have evolved since the previous review in 2005.  We are grateful for the active participation of the Filipino delegation headed by H.E. Mr. Adrian Cristobal Jr., Undersecretary of Trade and Industry.  I would also like to thank the discussant, Mr Martin Glass of Hong Kong-China, and Members of the TPRB for contributing to our fruitful exchange of views. At the outset, I note the very comprehensive comments that have been made by Undersecretary Cristobal on a number of themes.

2. Members commended the Philippines for the positive economic performance over the last few years.  This was based on a relatively open trade regime and helped by high remittances inflows and fiscal stimulus in response to the global economic crisis.  However, Members noted that the Philippines’ economy is operating below potential and encouraged the Philippines to speed up reforms, further improve its business environment and liberalize its FDI regime in order to raise productivity and compete more successfully with low-cost neighbouring economies.  Delegations also expressed their hope that the Government’s recently launched public-private partnerships initiative will encourage investment in major infrastructure projects.

3. Members acknowledged the Philippines’ strong commitment to the multilateral trading system and praised the Filipino delegation for being the first to use the alternative timeline for questions and answers agreed in the fourth appraisal of the TPRM. I concur with Undersecretary Cristobal in that in this case, the use of the alternative timeline has resulted in more focused comments and questions.  They also encouraged the Philippines to fully meet its notification obligations under various WTO Agreements.  Delegations noted that the Philippines has been increasingly implementing its trade policies through an extensive network of preferential trade agreements, mainly through its participation in ASEAN but also bilaterally.

4. Members expressed their appreciation of the steps taken by the Philippines to facilitate trade including by introducing automated customs procedures, further simplifying its tariff and by reducing its simple average MFN applied rate to 6.4%.  At the same time, some Members voiced concern about the predictability of applied tariffs. They called for further action by the Philippines to bind more tariff lines and bring its tariff bindings down close to its applied tariff rates.  Members also encouraged the Philippines to further simplify its non-tariff measures, notably its import licensing system.

5. In the observations made by delegations during this Review, there were suggestions for further action or improvements in certain areas. I note from the Philippines’ concluding statement that action is already being taken in several of these areas:

• Incentives:  Taxes and other incentives, often contingent on export performance and Filipino ownership, are provided by the Philippines in an effort to attract investment. Since those incentives add pressure on the budget deficit and discourage efficiency, the Philippines was invited to rationalize and harmonize them.
• SPS and TBT:  Members requested the Philippines to further increase transparency and base its SPS and TBT measures on international standards with a view to avoid imposing unnecessarily burdensome requirements.
• Competition:  There was appreciation for the designation of the Department of Justice as the Competition Authority. However, the Philippines was encouraged to adopt a general competition law and further promote competition in the economy.
• Government procurement:  While acknowledging that the government procurement regime allows for the participation of foreigners, Members expressed concern about the existence of a strong preference for domestic goods and services.  The Philippines was asked to consider using its public procurement framework to develop the infrastructure in a cost-effective manner.  Some Members also encouraged the Philippines to join the Government Procurement Agreement.
• TRIPs:  Members welcomed the steps taken by the Philippines to strengthen inter-agency collaboration and called on the Philippines to take actions to further improve IPR enforcement.
• Agriculture:  Questions were asked about the authorities’ efforts to make agriculture more productive and efficient and encouraged the Philippines to further liberalize the sector, in particular certain sensitive products such as corn, rice, and sugar.
• Energy:  Members invited the Philippines to meet its energy requirements through clean and sustainable sources.  The adoption of the Renewable Energy Act 2008 opening up investment opportunities for the sector was seen as a positive development.
• Services:  Members indicated that further multilateral liberalization of services should improve the efficiency of the Philippines’ economy as a whole and the competitiveness of its exports, especially by reducing costs related to banking, telecommunications, and transport.  Addressing infrastructural weaknesses would help the Philippines to tap the vast potential tourism represents, given its natural beauty and historical heritage.

6. This successfully concludes our fourth Review of the Philippines. The large number of advance questions and the many interventions by Members indicate the important role of the Philippines in the WTO.  I encourage the Philippines to pursue its reforms, including further improvement of its multilateral commitments both in goods and services.  I also recommend that Members support the Philippines in its continuing efforts, amongst other things, by providing further market access to its goods and services. For the Philippines’ economy, spring is indeed starting but there is a need for more hard work and tending loving care for it to enjoy the full blooms of high spring and the ripe fruits of summer.