For the Philippines, member-ship in such groups as ASEAN Regional Forum (ARF), the WTO, and the Asia-Pacific Economic Cooperation (APEC), has meant greater internationalization of domestic economic policy-making. This has also provided ideological support and political cover for those who champion greater economic and trade liberalization, and smaller government, through deregulation and privatization.

The recent WTO debacle in Seattle, however, indicates how far consensus is in the matter of unrestrained lifting of trade barriers. In particular, the Asian economic crisis has shown how moves for economic liberalization have been unable to provide protection for national economies in developing countries from the instability caused by international capital flows.

Moreover, the increased mobility of firms in a globalizing context has made it difficult for governments to pursue policies that would provide social safety nets for marginalized social groups in the grassroots, such as laborers and landless peasants.

In all this, it is far from clear when or whether liberalization might lead to the equal sharing of its putative gains.

Meanwhile, through membership in the WTO, and the formal institutionalization of this body (especially through a dispute settlement mechanism with multilaterally agreed on punitive powers), the Philippines is held accountable for commitments to liberalize radically, and soon.

Similar commitments are identifiable for ASEAN and APEC.

Among these commitments are:
1. The opening up of the retail trade sector, agriculture, and finance to foreign participation (APEC);
2. The opening up of the local banking industry to foreign participation (APEC);
3. The removal of all quantitative and tariff-based barriers to rice imports by 2005 (GATT/WTO);
4. The removal of all quantitative and tariff-based barriers to sugar imports by 2002 (ASEAN);
5. The opening up of the local service industry to foreign firms (GATT/WTO, through the General Agreement on Trade in Services, of GATS);
6. The dismantling of the Multi-Fiber Agreement (MFA), which protected local garment producers and created a quota system for exports from developing economies to their local markets (GATT/WTO).

As of this writing, bills have been passed in Congress towards the first two in the list.

Admittedly, the liberalization of these sectors can have positive effects: the undermining of local monopolies, oligopolies, and cartels; benefits for local consumers by bringing down the prices for these commodities and services; the challenging of local entrepreneurs to improve product quality, through incentives brought about by free and healthy competition.

One beneficiary of the globalization of manufacturing, for instance, and the diversification of high technology production through sub-assemblies and intra-firm trade, is the electronics/IT (information technology) sector, the fastest-growing Philippine export since 1992.

Liberalization has provided entrepreneurs increased access to foreign capital.

However, what is not acknowledged explicitly is that there are losers in this venture. And the losers are the more vulnerable sectors that do not have capital, and that cannot be protected by a state which has been emasculated by an international system that significantly reduces the individual states’ power to determine its own social agenda and policies.

More importantly and specifically, in the case of the Philippines, even as these commitments have already been made, the state has made no transitory moves for gradual implementation.

Nor has it made clear and concrete moves to provide safety nets for sectors that will be affected.  The impact of sudden liberalization will be devastating.

Meanwhile, the country continues to depend on revenue from overseas Filipino workers (OFWs).  Specific pull factors from outside assure Filipinos of a place in the labor market: the more rapid growth of other countries in East and Southeast Asia have also increased the cost of domestic labor in these countries; the growing senior population of Japan and even Taiwan, and the rapid decline in population growth in these countries; the aggressive recruitment of skilled workers by more developed economies such as those of the US, Canada, and Singapore.

These factors provide strong potential niches for Filipino workers abroad. However, they also contribute to the ongoing and debilitating brain drain from the country.*

(From “The international economic scene” of the Philippine National Situationer as of December 1999.  The report was prepared by the Institute on Church and Social Issues, with the participation of the Manila Observatory, the Ateneo Political Science Department and the Institute of Social Order.)
 

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