Philippine businesses need to turn the Regional Comprehensive Economic Partnership (RCEP) into a springboard for exports, rather than simply a channel for bringing more foreign products into the domestic market, according to SM Investments Corp. economist Robert Dan Roces.
The test of whether the world’s largest free-trade agreement is delivering for the Philippines can be seen in supermarkets, where Asian brands are increasingly visible while Filipino products remain relatively scarce across neighboring markets, Roces said at the inaugural RCEP Business and Investment Summit in Manila.
‘The proof of concept is how the grocery shelf is stocked,’ Roces said during a panel discussion titled ‘The Philippines in the RCEP Economy: From Participation to Competitiveness.’ ‘What we have to be able to do is to be present on all the shelves of the participating economies in RCEP.’
RCEP brings together the 10 ASEAN economies with Australia, China, Japan, South Korea and New Zealand, representing almost a third of global population and gross domestic product.
The agreement, signed in 2020 and implemented by the Philippines in 2023, seeks to reduce trade barriers and establish common rules that can facilitate cross-border commerce and supply chains.
For the Philippines, however, preferential market access is only the first step. Companies still need to meet the scale, quality, consistency and commercial requirements of buyers in larger regional markets.
‘What we need to do is shorten the trip and make the outbound journey easier,’ Roces said. ‘There are many Korean, Japanese and Thai products on our shelves today. But if we look for Filipino products in supermarkets in Seoul or Bangkok, they are much harder to find.’
The imbalance highlights a broader challenge for Philippine exporters-gaining access to regional markets does not automatically translate into distribution, brand recognition or sustained sales.
Frederic C. DyBuncio, president and chief executive officer of SM Investments, said Filipino suppliers must be prepared to compete on the requirements of large-scale retail.
‘RCEP opens the door, but Filipino products still have to earn their place on the shelf,’ DyBuncio said. ‘Suppliers need to meet the quality, volume and consistency that larger markets demand. Businesses like ours can help them get there.’
SM’s retail operations work with suppliers ranging from small businesses to established producers, giving the group a view of the capabilities needed to compete in modern retail.
Access to large domestic retailers can also give smaller suppliers experience in meeting requirements on quality, volume and reliability before they attempt to expand overseas.
The summit, organized by the East Asia Business Council and the Management Association of the Philippines, focused on how companies can translate RCEP’s market-access provisions into greater participation in East Asian trade and investment.
For Philippine producers, the opportunity extends beyond replacing imports or expanding domestic sales. Greater integration with RCEP markets could give companies access to a much larger consumer base while allowing them to participate more deeply in regional supply chains.
‘The real measure is not simply how many products come into the Philippines,’ Roces said. ‘It is whether more Philippine products can make the journey out.’