DP 2016-35 Australian SME Micro-Offshoring Opportunities in the Philippines: An Expanding Niche Market?

Peter K. Ross

This paper examines how Filipino-based business process outsourcing centers have been developing services, including offshore "staff leasing" and "co-managed services" arrangements, that are helping to overcome traditional small and medium enterprise (SME) resource constraints. These "micro-offshoring" models greatly reduce transaction costs for Australian SMEs seeking to outsource/offshore former in-house work and appear to be supporting a rapid increase in the number of Australian-based SMEs offshoring professional services to the Philippines. Micro-offshoring further provides job opportunities for Filipino tertiary graduates and entrepreneurial opportunities for local Filipino SMEs looking to enter and tap this market. This research also suggests that it may encourage Australian SMEs to shift to more long-term offshoring models over time, such as local incorporation, and therefore foster foreign direct investment.

Link: https://www.pids.gov.ph/publications/5730

DP 2015-38 Social Enterprises and Employment: Mainstreaming SMEs and Employment Creation

Leonardo A. Lanzona, Jr.

This paper argues that mainstreaming small and medium enterprises (SMEs) and social enterprises (SEs) into various international treaties will require the assumption of positive externalities, which markets cannot fully evaluate. To show this, the possible influence that SEs may have on SME development and, eventually, on employment will be discussed. SEs are small- and medium-sized commercial businesses providing valuable social service to customers and sustainable jobs and training for up to about 200 people. Their goal is to provide public goods to the communities, in the form of increased productivity and employment. What separates SEs from SMEs is that it addresses the social issues at the forefront. Through this paper, the importance of providing such public goods to SME development will be highlighted. This study shall provide inputs to the analytical framework for the Philippines' engagement in APEC under the priority theme of "Mainstreaming Small and Medium Enterprises and Employment Creation" and shall make concrete recommendations on how employment can be created through the formation of social enterprises or socially-inclusive companies.

Link: https://www.pids.gov.ph/publications/5553

DP 2015-37 Doing Business: A Review of Literature and Its Role in APEC 2015

Ronald U. Mendoza, Tristan A. Canare, and Alvin Ang

Since 2006, the World Bank has been ranking almost 200 countries in terms of their ease of doing business (EoDB) to underscore the importance of a thriving private sector in promoting high and inclusive growth. Comparing these metrics for business friendliness among economic partners is more important now that multilateral agreements that promote integration—such as the ASEAN Economic Community—are ongoing. Subsequently, the Asia-Pacific Economic Cooperation (APEC) has its own specialized group that monitors the EoDB progress of its members. Through a comprehensive review of theoretical and empirical literature on doing business, and through an assessment of the relative doing business performance of APEC economies, this paper provides policy inputs to the APEC EoDB Initiative and initial policy guidelines and recommendations on what the Philippines could propose for further discussion and elaboration in the APEC EoDB work stream when it hosts the summit this year.

Link: https://www.pids.gov.ph/publications/5552

DP 2015-34 Evaluation of the APEC Environmental Goods Initiative: A Dominant Supplier Approach

George N. Manzano and Shanti Aubren Prado

The paper evaluates the feasibility of sectoral liberalization of environmental goods for the Asia-Pacific Economic Cooperation (APEC). Using the model originally developed by Wonnacott, it argues for the liberalization of goods predominantly supplied by APEC members, thereby minimizing the free rider problem that usually afflicts most favored nation liberalization. The paper then ranks the different items in the APEC list of environmental goods according to economic advisability, given the predominant supplier framework. It thus demonstrates the economic rationale why APEC, as a whole, should consider liberalizing a number of environmental goods. The paper also examines the distributional impact of the proposed scheme on the individual members, particularly on the trade interest of the Philippines.

Link: https://www.pids.gov.ph/publications/5538

DP 2015-33 Green and Gold: Promoting Eco-Adventure and Cultural Tourism for Inclusive and Sustainable Growth

Oscar F. Picazo

This paper briefly reviews the literature on the emerging concept of eco-adventure and cultural tourism, dubbed "green and gold tourism," respectively. It provides the rationale for conducting such a study in the Philippines (why the concern for inclusivity and environmental sustainability in tourism). It then establishes the feasible scope of such study and lists illustrative activities of inclusive and sustainable green and gold tourism. It also identifies concerns and issues about green and gold tourism in APEC countries and in the Philippines. Finally, it classifies emerging good practices in this area, including volunteer travel, promotion of home stays, community-organized and -owned tourism activities, establishing nonmainstream tourist routes and destinations, and tourists' involvement in cultural preservation and eco-rehabilitation.

Link:  https://www.pids.gov.ph/publications/5537

DP 2014-21 Implications of an EU FTA to the Philippine Labor Market

Leonardo A. Lanzona, Jr.

The Philippine is currently negotiating a free trade agreement (FTA) with the European Union (EU). This paper is expected to shed light on these negotiations in terms of the possible effects of the FTA on the employment in particular. Conceptually, the effects of FTA on the labor market may come from two sources. The first is the intensification of free trade which can either be an opportunity or a threat to the workers, depending on whether the trading of goods and services are complementary or substitutable to the goods and services produced in the country. The second source is the proposed set of core labor standards which the EU can impose given the previous FTAs it has forged with other countries. These standards can result in making the country less competitive. Analyzing the experience of the country with its previous FTAs with the ASEAN and Japan, the paper found that FTAs are as whole to have a positive impact on employment. While there may be unemployment caused by the entry of more imports from other countries, the effect of the trade commitments found in FTAs is essentially to mitigate such negative effects. It is then proposed that the country should negotiate within the same rules and standards that are set in their previous FTAs and that appropriate taxes and subsidies should be imposed in order to counteract the negative effects of further trade and labor standards.

Link: https://pascn.pids.gov.ph/files/Discussions%20Papers/2014/pidsdps1421.pdf

DP 2014-08 Environmental Aspects of a Potential Philippines-European Union Free Trade Agreement

Antonio G.M. La Viña, Lai-Lynn Barcenas, Carla Lesaca, and Liezel Bobadilla

This paper is on the environmental aspects of a potential Philippines-European Union Free Trade Agreement (Philippines-EU FTA). Potential environmental issues in the negotiation of such an FTA (if at all undertaken) are identified to better prepare the Philippine negotiating panel and equip them with information and analysis to make well-informed positions on such issues. It looks at the interaction between the multilateral trade regime – the World Trade Organisation principally –and multilateral environmental agreements (MEAs), reviews the Philippine approach to environment –related trade measures, and looks at Philippine practice and implementation of environmental agreements from a trade perspective. EU policies on trade, environment and development are also discussed to anticipate what could be EU positions during the FTA negotiations with the Philippines.

Link: https://pascn.pids.gov.ph/files/Discussions%20Papers/pidsdps1408.pdf

DP 2014-04 An Analysis of the Philippine Offensive and Defensive Interests in the Non-agricultural Sector: Inputs to the PhilippineEuropean Union Free Trade Agreement

George N. Manzano

In drawing up the negotiating stance of the Philippines in light of the Philippine-European Union, it is important to articulate its offensive and defensive interests. Indications of the offensive and defensive interests can be gleaned from standard measures of competitiveness as well of complementarities of the partners. However, in operational terms, negotiators would require analysis that is carried out at more specific tariff levels. This paper proposes the framework to generate different offensive and defensive lists of commodities in the non-agricultural sector as input to the Philippine negotiators. Because the criteria that is used in generating the offensive and defensive lists is purely economic in nature, the negotiators are expected to weigh in the political and non-economic criteria to determine the final lists of for negotiations in the PH-EU FTA.

Link: https://pascn.pids.gov.ph/files/Discussions%20Papers/pidsdps1404.pdf

DP 2014-03 The Potential Impacts of a Free Trade Agreement with the European Union on the Philippine Fisheries Sector

Danilo C. Israel

This study assessed the likely economic, distributional and fisheries resource impacts of a potential free trade agreement (FTA) between the Philippines and EU on the fisheries sector of the former. The study used secondary data from institutional sources and results and findings of past studies. Among others, the study found that a) the elimination of tariffs will likely increase fisheries outputs and exports as well as help reduce poverty in the fisheries sector and the general population; b) the elimination of tariffs will likely diversify the currently limited country destinations and number of exported fisheries products of the Philippines to the EU; c) other than tariffs, there are non-tariff measures (NTMs) that significantly impede freer flow of fisheries products from the Philippines to the EU that need to be considered; d) some participants in the Philippine fisheries sector will gain from an FTA while others will lose but the net benefits to the sector and economy is not known; and e) increase in fisheries exports due to the FTA will likely worsen fisheries resource overexploitation although the inflow of cheaper imported fish will tend to reduce the overexploitation.

Link: https://pascn.pids.gov.ph/files/Discussions%20Papers/pidsdps1403.pdf

DP 2012-17 Comparative Study on the Different Free Trade Agreements Entered Into by Japan with other Asian Countries

Jeremy Gatdula, George Habacon, John Vincent Pimentel, and Mary Jaselle Din

A general review of the Philippine-Japan Economic Partnership Agreement (PJEPA or the Agreement) was originally scheduled in December 2011. Accordingly, it was deemed that an assessment on how the Agreement affected the Philippine economy after three years of implementation would be helpful not only for the immediate purposes of the review but also for future negotiating processes. Part of the assessment would be to review Japanese bilateral agreements with other Asian countries to compare the concessions that each country got in relation to that provided for in the Agreement. This is for the Philippines to assess whether to propose revisions to the Agreement in cases where conceivably better concessions were obtained by the other countries. The main objective of this paper is to compare the provisions of the free trade agreements (FTAs) on trade in goods, trade in services, investment, and sanitary and phytosanitary measures that Japan has with other select Asian countries. Those countries are Brunei, India, Indonesia, Malaysia, Singapore, Thailand, and Viet Nam. The results of the comparison will be further compared with the provisions of the PJEPA. The output of the project is a comparative study, including data on the differences and similarities of the provisions of these FTAs, taking into consideration the economic and political environment as rationale for these variations.

Link: https://pascn.pids.gov.ph/files/Discussions%20Papers/2012/pidsdps1217.pdf