RCEP opens services opportunities, but PH firms face readiness gaps
By Francis Allan L. Angelo
Philippine firms need to strengthen their skills, meet regional standards, and build business networks to take advantage of opportunities in business and professional services under the Regional Comprehensive Economic Partnership (RCEP), said Philippine Institute for Development Studies (PIDS) Senior Research Fellow John Paolo R. Rivera, Ph.D.
The finding matters because access to regional markets only benefits Filipinos if local companies can use it. Whether RCEP leads to jobs, higher incomes, and business growth, or goes mostly to foreign competitors, depends on how ready Philippine firms are.
Rivera identified commercial presence and the movement of professionals as areas where the Philippines could pursue opportunities under the regional trade agreement.
However, he noted that market access alone does not guarantee that local firms can compete or capture economic gains.
“The policy question is no longer ‘Are we in?’ but can Philippine firms use the agreement?” Rivera emphasized.
RCEP groups the 10 members of the Association of Southeast Asian Nations (ASEAN) with Australia, China, Japan, New Zealand, and South Korea. It took effect for the Philippines on June 2, 2023.
The economy Philippine firms are bringing into the pact grew 5.7% in 2024, with inflation averaging 3.2%, within the Bangko Sentral ng Pilipinas’ 2–4% target, according to the PIDS discussion paper Macroeconomic Prospects of the Philippines in 2025–2026, co-authored by Rivera and published in December 2025.
That paper also lists supply-chain realignments under RCEP among the external shocks to watch and says the information technology and business process management (IT-BPM) sector faces concerns over manpower quality, as AI integration requires “more advanced digital and cognitive skills.”
Both this paper and the later one cited below belong to the PIDS Discussion Paper Series, which PIDS describes as preliminary studies that are subject to revision, unedited, and unreviewed.
PIDS also states that the views expressed in the papers are those of the authors and do not necessarily reflect those of the Institute.
PIDS is the government’s primary socioeconomic policy research institute.
Rivera presented “The Philippines in the RCEP Economy: From Participation to Competitiveness” at the 1st RCEP Business and Investment Summit on September 9 at Shangri-La The Fort in Taguig City.
His presentation drew on studies examining the Philippines’ services trade and tourism sectors.
Rivera identified gaps in education and advanced training, professional accreditation and licensing, regulatory harmonization, and digital and physical infrastructure as constraints on the country’s competitiveness.
He also noted that existing advantages, including competitive costs, English-language capability, and a skilled workforce, require continued investment to remain relevant in regional markets.
“Yesterday’s comparative advantage can become tomorrow’s constraint,” he said, underscoring the need to continuously upgrade the country’s capabilities.
Strengthening MSME readiness
Research on tourism by Rivera found that micro, small, and medium enterprises (MSMEs) face challenges, including low awareness of RCEP, infrastructure gaps, workforce readiness issues, and limited preparation time.
Many MSMEs may benefit indirectly through tourism value chains rather than participating in regional markets independently.
Strengthening their connections with larger businesses, suppliers, and regional networks could help them participate more effectively in these value chains.
The findings point to the need to go beyond raising awareness of RCEP.
Enterprises also need the skills, resources, and capacity to meet regional requirements, improve their products and services, and establish partnerships that can help them reach wider markets.
Building competitiveness
Rivera outlined five areas for action: inform firms about market opportunities; enable participation by addressing infrastructure and regulatory gaps; upgrade skills, standards, and professional qualifications; connect firms to regional networks and supply chains; and promote competition that encourages higher productivity.
These measures require coordinated action from government, businesses, and academe.
Government agencies need to make trade commitments more accessible to enterprises, address regulatory bottlenecks, and improve infrastructure.
Businesses need to invest in technology, management, workforce capabilities, and regional partnerships.
Academe can help align curricula, credentials, research, and training with regional requirements.
The call for coordination echoes a preliminary PIDS discussion paper, published in August 2026 by Rivera, Michael Ralph M. Abrigo, and Valerie Gilbert T. Ulep, which argues that the country’s development constraints “stem not from a lack of policies or resources, but rather from fragmented institutional arrangements.”
The paper adds that institutional reforms “complement but do not substitute for greater investment.”
Rivera joined Rafael Fernandez de Mesa, President and CEO of Aboitiz Economic Estates and Aboitiz Land; George Barcelon, ASEAN-BAC Philippines Council Member; and Robert Dan Roces, Vice President and Group Economist of SM Investments, as panelists in the competitiveness discussion.
Read Rivera’s studies below and more at:
- Macroeconomic Prospects of the Philippines in 2025–2026: Restoring Confidence amid Glocal Transitions — https://doi.org/10.62986/dp2025.36
- Reshaping Economic Institutions for Transformational Partnerships in Human Capital Development — https://doi.org/10.62986/dp2026.16
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