Macroscope | Philippines has hard act to follow as Apec chairman but comes prepared

As Laura del Rosario, the Philippines senior official responsible for Apec chairmanship in 2015, laid plans for the year ahead, she chose Legazpi in Albay as the perfect setting for an inaugural meeting – what we call the informal senior officials meeting (iSOM) in early December. With the perfect cone of the Mt Mayon volcano towering over the city, the message was clear: emergency preparedness must be one of the year’s highest priority themes.

And the theme was put to the test more speedily than she might ever have imagined. Typhoon Hagupit barrelled into and over the Visayas in the central Philippines and bore straight down on Legazpi. With just three days to go to the meeting, Mayor Noel Rosal told Manila he would be too busy coping with Hagupit to host senior Apec officials. At impossibly short notice, we were all informed that the meeting had been moved to Manila.

To the huge credit of the Philippine government, the shift moved like clockwork. This was emergency preparedness at work – and with an average 20 typhoons a year in the Philippines, and at least 60 days of Apec meetings set across the country in 2015, this quick footwork might be required more than once in the coming 12 months.

After an effective and very productive year of Chinese Apec chairmanship, the Philippines has a hard act to follow. Some of the priorities for the year ahead have already effectively been set by developments in 2014: for example, work on a “collective strategic study” of how to form a Free Trade Area of the Asia Pacific (FTAAP); work on improving the region’s physical infrastructure; managing the challenges of urbanisation; putting flesh on the “connectivity framework” that links physical, institutional and person-to-person connectivity; deepening the region’s financial markets and making them more transparent; and making the region’s services markets more open and efficient.

The most tantalising – but most distant – of these inherited priorities is of course the FTAAP, a vision for comprehensive regional integration first tabled a decade ago by the region’s business leaders. In 2004, Apec leaders trashed the idea as unrealistic. Today it is being taken seriously. But the Chinese aspiration to finish the deal by 2025 may still be ambitious; the “collective strategic study” will not be done before the end of 2016 – and that just scopes the idea. Don’t hold your breath for evidence of rapid progress.

But many priorities will distinctively be the Philippines’ own: tackling regional inequalities and the rich-poor divides in each of our economies; strengthening education systems across the region; helping SMEs to build international competitiveness; making it easier for workers to move around the region. It is noteworthy that after six or seven years during which Apec was being led by its developed economy members (Australia, the US, Singapore, Japan, Russia), the Philippines is the third successive chair with a developing economy agenda (following Indonesia in 2013 and China in 2014). Significantly, these developmental and capacity-building priorities will continue through to the end of the decade, with Apec chairmanship being passed to Peru, Vietnam, Papua New Guinea and Chile by 2019.

The Philippines will also focus on a number of important externally-driven liberalisation priorities: the completion of the Asean single market by the end of 2015; the ratification of the WTO’s landmark Trade Facilitation Agreement which will reduce border frictions and expenses as exports pass through customs; and the long-sought update of the Information Technology Agreement (ITA) which will bring down tariffs on IT products. Also significant will be the mid-year ratification of the ambitious Pacific Alliance, a trade agreement between Chile, Colombia, Mexico and Chile (three of these are Apec members) which will improve the integration of the South American economies into the Asia-dominated Apec.