Philippines Ready: Can ASEAN Economic Community happen in 2015?

The way to an ASEAN Economic Community, envisioned by the 10-member Association of South East Asian Nations to come about in 2015, is going through a rough ride, a ranking official of ASEAN said on Tuesday.

At the moment many of the member-states are experiencing difficulties in complying with or implementing the requirements for an integrated economic community, ASEAN deputy secretary general Dr. Lim Hong Hin,  told participants to the annual Punongbayan & Araullo CEO Business Forum in Makati City

 "Despite progress in a number of areas, 28 percent of AEC measures due to be implemented for 2008-2011 are still pending as of end-August 2012," said Lim.

 These measures cover trade – customs modernization standard and conformity and services liberalization – investments, agriculture, consumer protection, and ratification of transportation agreements.

 ASEAN members have failure to comply with decisions, treaties and protocols at the national levels, Lim noted.

 "Others point to implementation bottlenecks due to lack of necessary funds to support the integration measures, particularly at the national level," Lim revealed.

 "This is a concern because failure of many ASEAN countries to follow through on their commitments may undermine the success of AEC," he said.

 The Philippine scorecard showed 104 of 110 measures have been implemented during the Phase 1 of the ASEAN Economic Community blueprint, said Trade Undersecretary Adrian Cristobal Jr.

 Two of the measures Philippines still needs to comply with are in the areas of transportation and infrastructure, the Philippine official noted.

 The role of private sector role is vital for the ASEAN Economic Community to succeed, Lim said, encouraging it to take the lead in raising investments and productivity, adopting a sound risk management practice and risk analyses, and promoting corporate governance and consumer education.

 At this point he discounted the idea of creating an ASEAN single currency, saying "the time is not ripe for a discussion on a single currency just like the euro."

 AEC is a single market and production base economy where goods, services, investments, capital, and skilled labor can flow freely within a community of nations – home to 600 million people and a combined gross domestic product of more than $1.13 trillion.

 ASEAN+6

 During the forum, Lim said the association is looking forward to start discussions for a broader economic partnership with six non-ASEAN countries before the year ends. The idea was to create the biggest free trade area in the world

 "In support of greater integration with the global economy, ASEAN countries are actively working to launch the start of negotiations for the Regional Comprehensive Economic Partnership with China, Japan, Korea, India, Australia and New Zealand by the end of this year," Lim noted.

 These countries have existing free trade agreements with the regional bloc, including the ASEAN-China FTA, ASEAN-Japan, ASEAN-Korea, ASEAN-Australia and New Zealand, and ASEAN-India.

 "Despite differences, we want to move forward... and come out with a guiding principle to create RECP," said Lim.

 ASEAN+6 would cover wide areas of the Asia-Pacific region, and Lim said is more feasible and realistic than the Trans-Pacific Partnership. "Once completed, it will be the largest FTA in the world."

 The 2005 Trans-Pacific Strategic Economic Partnership Agreement is a multilateral free trade that claims to further liberalize the economies of the Asia-Pacific region.

 All efforts at creating RCEP were aimed at consolidating all free trade agreements entered into by ASEAN. "The goal here is to promote wider economic integration," Lim said.

GMA News

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₱3-Billion Japan Smartphone Chip manufacturing plant Ready for Operation in Batangas

PHILIPPINE ECONOMIC Zone Authority Director-General Lilia B. De Lima and Tsuneo Murata, Murata Manufacturing Co. Ltd. president, unveil a plaque at the plant opening in this official photo release on the event

Murata Manufacturing Co., Ltd. of Japan yesterday announced the completion of its initial ₱3-billion investment in a manufacturing facility; it's largest in Asia outside Japan at the First Philippine Industrial Park in Tanauan, Batangas.  Philippine Manufacturing Co. of Murata Inc. (PMM) completed the first of four buildings where it plans to employ 3,000, notwithstanding the current slump in electronics sector.

PMM will initially produce multilayer monolithic ceramic capacitors (MLCCs), Murata's flagship product.

Murata president Tsuneo Murata said PMM would produce other components in the future.

The plant would be a production hub of MLCCs for emerging markets. Murata of Japan is the leading manufacturer of MLCCs, with global market share of 35 percent. It also produces components used in most electronic and electrical devices such as notebook computers, mobile phones, television sets, cameras, and other home appliances.

The entire facility covers 22.7 hectares, where the first building occupies 3.6 hectares. The first building will start operations in January 2013 where it would employ 300 workers, mostly as operators.

Murata said when fully operational, the factory will be able to produce a variety of models in representative scales, which would increase the company's production.

Murata said this expansion in this part of the world is in response to the increased functionality of electronics and the growing demand for new applications such as smartphones and tablets.

As Murata's overseas production base, the Philippine operations would have a critical role part in Murata's expanding overseas production, the company said.

The company said it decided to locate in the Philippines due to its low-cost (low wages, lower capital investment) operations and to take advantage of a large-high-quality and English-speaking workforce with high-retention rate.

As a company registered with the Philippine Economic Zone Authority, the company would also be able to enjoy favorable treatment in corporate taxes and materials and equipment imported from Japan.

The Philippine plant is Murata's fourth in Asean, the others are in Thailand, Singapore and Malaysia.

PMM president Takashi Masuda said the Philippine plant has the largest lot area where the company would be able to expand its products and its scale in the future.

Masuda said the company plans to build three more buildings, totaling four buildings which would have 3,000 workers in the future.

A multiyear ceramic capacitor is an electronic component that stores and releases electrical energy. It stabilizes voltage by going through a charge-discharge cycle and is widely used to absorb noise and detect signals of certain frequencies.

Chip type multilayer ceramic capacitors are essential components for electrical equipment.  It is said that there are more than 500 MLCCs are assembled into one latest smart phone; 1,000 to 2,000 in a car; 700 in a laptop, and 500 in an LCD TV.

These products are produced for major EMS (electronic manufacturing services) and local manufacturers where Murata faces intense competition against Asian suppliers.

Murata said these competitors include Samsung Electronics Manufacturing of Korea and Yageo of Taiwan.

Murata Manufacturing of Japan is a worldwide leader in the design, manufacture and sale of ceramic-based passive electronic components and solutions, communication modules and sensors.

It has an annual revenue of 585 billion yen ($7.1 billion). The Kyoto-based company has 78 subsidiaries and sales offices worldwide where it has 37,000 employees.

About 85 percent of products sold by Murata are produced outside of Japan. Forty percent of all its product lines go to communication application.

Murata is also expanding in Thailand and Malaysia so far, Masuda said but the Philippines has the biggest potential for expansion.

Amid the slowdown of Philippine electronics exports, Masuda said the electronics industry in the Philippines will further expand and develop and that there are emerging countries they would require more electronic components and devices.

Lilia de Lima, director-general of the Philippine Economic Zone Authority, said the initial investment could add p to ₱3 billion as the company spent almost ₱2 billion just for the land development and the building.

Malaya

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Pamakalaya leftist group claimed USS George Washington warship carrying nukes to the Philippines

US warships carrying nukes, fishers claim

U.S. warships visiting Philippine ports must be assumed to carry nuclear weapons.

This view was aired over the weekend by the Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya), noting that the US policy of neither confirming nor denying that such ships carry nuclear armaments must be taken to mean that they have those weapons.

Pamalakaya noted that some countries generally opposed to nuclear weapons do not allow any US nuclear warship to dock at their ports.

There is no sense for US aircraft carriers and other ships to carry ballistic missiles armed with conventional warheads, Pamalakaya argued.

"But President Aquino and top officials of the administration are ignoring this highly strong probability," the group added.

The US Embassy in Manila last week announced that the aircraft carrier USS George Washington would arrive in Manila for a goodwill visit on Wednesday.

This port call is supposed to "further enhance the strong historic ties" between the US and the Philippines.

The aircraft carrier, which has two nuclear reactors that allow it to sail for nearly 18 years without refueling, was commissioned on July 4, 1992.

Its flight deck length is 1,092 feet, while its width is 275 feet. The ship is 244 feet high and can carry 75 aircraft.

"The Aquino administration, as usual, wants to make it appear as regular port call but that is not the real score. The real score is that the US is preparing the country as staging ground or launching pad for nuclear attack against entities or nations that would challenge its dominance as a global policeman," Pamalakaya National Chairman Fernando Hicap said.

Pamalakaya scoffed at the participation of US sailors in community projects here and noted that the professional exchanges that the government talks about will involve the current territorial dispute between the Philippines and China.

Earlier, Hicap charged Mr. Aquino of violating the Constitution by allowing US military forces to use the Subic International Airport.

"The Subic International Airport is just a name. In real life, it is a US military facility operating on a regular basis to accommodate increasing numbers of American troops gearing for wars of aggression in different parts of the globe," Hicap said.

With the arrival of more than 2,200 US troops last week for the Philippine Amphibious Landing Exercise with 1,600 soldiers of the Armed Forces in various parts of the Philippines from October 8 to 18, he said, "it has become clear that Subic is now back in the limelight as the largest American base outside the US mainland."

Hicap said the proposal of Visiting Forces Agreement Commission Executive Director Edilberto Adan to allow greater use of Subic by US forces is an open endorsement of the retaking by the US of its former naval base.

Pamalakaya lamented that the Congress has not said a word about the continuing port calls of US nuclear warships and noted that legislators should take action on the matter.

Business Mirror 

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