Philippines

The Philippines’ Relationship With ASEAN

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Op/Ed by Bob Shead

ASEAN, (the Association of South East Asian Nations), was founded in 1967 “to strengthen further the existing bonds of regional solidarity and cooperation.”  The Philippines was one of the founding member countries when ASEAN was set up in Jakarta, while the ASEAN Economic Community (AEC), which was implemented in December 2015, has a primary purpose to create one of the largest single market economies in the world, facilitating the free movement of goods, services, and professionals between the 10 member states.  As a result, the Philippines relationship and interaction with ASEAN and its members is of key importance to the bloc.

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ASEAN Philippines Links

ASEAN is one of the cornerstones of the Philippines’ foreign and trade policies.  This is manifested in the Philippines policy to promote a more peaceful, stable, and free South East Asia, through the pursuit of different initiatives, in the policy making, economic, trading and functional cooperation activities.  To illustrate, the Philippines actively participates in the shaping of ASEAN’s regional agenda that will ensure the bloc’s relevance and importance in the international arena.  More importantly, the Philippines has constantly affirmed that ASEAN centrality should be promoted at all times, both in the group’s internal and external dealings, and that ASEAN continues to remain as the driver of regionalism, and act as an interlocutor between competing regional powers.  The underlying agenda of this is the Philippines’ strong support to strengthen a regional order that promotes good behavior, international trade and which adheres to internationally accepted norms and rules for the benefit of the region.  This is in line with the development of the AESAN Economic Community (AEC).  

ASEAN is not a supranational organization but rather a regional association.  The member states remain as the reference point of a regional organization that aspires to be both a political and economic community.   ASEAN, as a bloc, does not have a common foreign policy but strives to achieve a common position in issues that affect the region. 

The policy direction taken by the respective member-states is shaped by and grounded on their national interests and agenda.  This has led to friction between countries in ASEAN.   Due to different political, economic, and sociocultural systems of the ten members, there are instances when the member-states take on varying and conflicting positions on issues.  Given this context, the Philippines has to maintain a delicate and diplomatic posture in its relations with other member states, in order to push forward its interest, in particular in sensitive issues like protection and promotion of human rights, democracy, economic and trading issues, territorial and maritime issues, plus other complicated relationship problems.  

There are instances where there is no alignment of interests and agenda, leading to the Philippines, along with other ASEAN member states, tend to take the lowest common denominator, in order to have consensus on issues so as to arrive at an agreement.   Additionally, the Philippines recognizes that there exist differences in the perception and threat analysis that confront the member states.   This was last exemplified in the 2012 ASEAN Foreign Ministers Meeting debacle, where there was a failure to issue a Joint Communique. 

Alongside the multilateral framework in the conduct of Philippine-ASEAN relations, there is also a strengthening of the bilateral and trading ties with fellow member states that happens in parallel.  There is a convergence of national interest, specifically in the traditional security issues, which could be brought about by perceived common threat in the regional environment.  For example, the Philippines and Vietnam have elevated their bilateral ties to that of a strategic partnership.  In a statement released by the Philippine Department of Foreign Affairs following the conclusion of the first meeting of Philippines-Vietnam Joint Commission on Concluding a Strategic Partnership, the two sides “on the basis of amity, mutual respect and cooperation, the bilateral relations are growing in various aspects, including in political, trade and investment, fisheries, marine and oceanic affairs, defense and security cooperation, among others.”   The improvement in the relations between the Philippines and Vietnam is worth noting, given the minimal interaction in the past.   This was originally due to the fact that both countries were members of ASEAN, with the same problems.  Consequently, trading relations between the two countries have also improved.

ASEAN-EU links

The ASEAN Economic Ministers (AEM) and the EU Trade Commissioner met on 10 March 2017 in Manila, for the 15th AEM-EU Trade Commissioner Consultations.  These Consultations were co-chaired by H.E. Ramon Lopez, Secretary of Trade and Industry, of the Philippines, and H.E. Cecilia Malmström, EU Trade Commissioner.  The AEM and the EU Trade Commissioner noted the strong trade and investment in 2016, and the EU remained the largest external source of Foreign Direct Investment (FDI) flows into ASEAN in 2015 with € 23.3 billion.

ASEAN-US links

Recently the US Ambassador to the Philippines, Ambassador Sung Kim hosted a dinner reception at the US Embassy Residence to celebrate 40 years of US-ASEAN relations.  In his address, these were the main points covered:

It all began in 1977 when the US started engaging with the Association of Southeast Asian Nations as a “dialogue partner” to explore areas of cooperation in terms of trade and investment, technology transfer and other areas for mutual economic growth and development.  The partnership is also focused on supporting economic integration, promoting opportunities for women and addressing transnational issues and challenges. 

The US, in fact, was the first non-ASEAN nation to name an ambassador to the regional bloc in 2008, after which a dedicated mission to ASEAN was established in Jakarta, Indonesia.  In the last five years, some $4 billion has been spent by the US on various development projects aimed at benefiting the constituencies of ASEAN member-nations.

This year also happens to be the 50th year of ASEAN, with the Philippines holding the rotating chairmanship.  Certainly, a lot of interest and scrutiny is being placed on the relationship between the US and ASEAN considering recent developments such as the withdrawal of the US from the Trans-Pacific Partnership (TPP) trade deal.

Ambassador Kim also said that the US will continue to promote free trade and is looking at bilateral free trade agreements between member countries of ASEAN, including the Philippines.  

However, former Philippine Socio-Economic Planning Secretary Cielito Habito has suggested that a bilateral deal between the US and ASEAN as a “single party” may be preferable, since a number of the member nations do not have an FTA with the US.  Many are confident, however, that the relationship between ASEAN and the US will continue to flourish for continued peace and stability in the Asia-Pacific region.

Philippines and Indonesia relations – as the HQ for ASEAN

The Indonesia and Philippines relationship have been traditionally close for many years and this relationship has grown stronger during the history of ASEAN, and its established HQ in Jakarta. The two countries are very close allies, and both have supported each of their policies in the region such as democracy and the maritime law in the South China Sea.  Since diplomatic ties were officially established in 1949, Indonesia and Philippines enjoy a cordial bilateral relationship.  Both countries have established embassies in each capital, Indonesia has their embassy in Manila and consulate in Davao City, while Philippines has their embassy in Jakarta and consulate in Manado and Surabaya.  High rank stately visits have been conducted for years.

Additionally, both nations are the founders of ASEAN and the members of the Non-Aligned Movement and APEC.  Both countries are members of the East ASEAN Growth Triangle together with Brunei Darussalam and Malaysia in the BIMP-EAGA.  Both countries are mainly composed of islands.

Bilateral trade has trended positively in recent years.  According to the Indonesian Ministry of Trade, trade has increased from $1.12 billion in 2003 to $2.9 billion in 2009, and $3.89 billion in 2010.  Indonesia is currently the Philippines’ biggest supplier of coal, exporting about 70% of the Philippines’ coal imports.  Although as of June 2016, Indonesian coal exports to the Philippines are currently on a moratorium due to the growing concern of piracy in the Sulu Sea.

BIMP-EAGA

BIMP-EAGA (Brunei, Indonesia, Malaysia, and Philippines – East ASEAN Growth Area) was launched in 1994 as a co-operation initiative by Brunei Darussalam, Indonesia, Malaysia and the Philippines, all of which are member countries of the regional Association of Southeast Asian Nations (ASEAN).  The objective behind the creation of BIMP-EAGA is to accelerate economic development in the four countries’ “focus areas” which, although geographically distant from their national capitals, are in strategic proximity to each other, in one of the world’s most resource-rich regions.  The BIMP-EAGA initiative is market driven and operates through a decentralized organization structure involving the four governments and the private sector.

BIMP-EAGA co-operation aims to increase trade, tourism, and investments inside and outside the sub-region by:

Facilitating the free movement of people, goods, and services

Making the best use of common infrastructure and natural resources

Taking the fullest advantage of economic complementation  

BIMP-EAGA covers a land area of 1.6 million square kilometers and has a combined population of 57.5 million.

It comprises the following focus areas – the entire Sultanate of Brunei Darussalam,  the provinces of Kalimantan, Sulawesi, Maluku, West Papua and Papua in Indonesia; the states of Sabah and Sarawak, and the federal territory of Labuan in Malaysia; the island of Mindanao and the province of Palawan in the Philippines.

This sub-region has exceptional natural resources, encompassing two of the world’s largest rainforests (in Borneo and Papua), and biodiverse marine systems in the South China Sea, Celebes Sea, and, Sulu Sea.

BIMP-EAGA has a long history of participation in the global economy, stretching back to the silk route and spice trade between Europe, China and other parts of Asia.  EAGA supplies the export markets of ASEAN, North and South Asia, and the Middle East, following the expansion of its air, shipping, and land transport links, and the development of investment incentives.

Related-Reading-Icon-Asean Link RELATED: ASEAN Briefing Philippines Investment News Archive
Conclusion

The Philippines remains a strong and founding member of the ASEAN grouping, however, the many differing political differences do create problems within the organization.  It would appear that trading relations will become the most important aspect of ASEAN and the Philippines relationship.

The group has spurred economic integration, signing six free-trade agreements with other regional economies.  Yet various experts say that ASEAN’s impact is limited by a lack of strategic vision, diverging national priorities, and weak leadership.  ASEAN’s biggest challenge is negotiating a unified approach to China, particularly in response to its widespread maritime claims in the South China Sea.  Another important aspect is the United States still sees ASEAN as vital to the success of its strategic rebalance and strategic relationship, both politically and economically with Asia.  Likewise, other trading groups and nations, the EU, Russia, Australia, Japan etc, also regard ASEAN as essential in maintaining the trading strength of the individual member states of ASEAN.

Foreign investors should especially be on the look out for infrastructure development projects further linking the Philippines to the rest of Asia, while the Philippines itself is positioning itself both as a BPO service center for ASEAN (and to some extent, China) and as a light manufacturing alternative to Chinese based production. 


About
 Us

Bob Shead is Asia Briefings Philippines Correspondent and is based in Manila. He has 25 years experience as a diplomat in Asia.

Asia Briefing is produced by Dezan Shira & Associates, a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing throughout Asia. For assistance with foreign investment matters in the Philippines, please email philippines@dezshira.com or visit www.dezshira.com.

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

 ‍

Related-Reading-Asean Book Title

dsa brochureDezan Shira & Associates Brochure
Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.


an_introduction_to_doing_business_in_asean_2017_-_image
An Introduction to Doing Business in ASEAN 2017
An Introduction to Doing Business in ASEAN 2017 introduces the fundamentals of investing in the 10-nation ASEAN bloc, concentrating on economics, trade, corporate establishment, and taxation. We also include the latest development news for each country, with the intent to provide an executive assessment of the varying component parts of ASEAN, assessing each member state and providing the most up-to-date economic and demographic data on each.



Human Resources in ASEANHuman Resources in ASEAN
In this issue of ASEAN Briefing, we discuss the prevailing structure of ASEAN’s labor markets and outline key considerations regarding wages and compliance at all levels of the value chain. We highlight comparative sentiment on labor markets within the region, showcase differences in cost and compliance between markets, and provide insight on the state of statutory social insurance obligations throughout the bloc. 

 

 

An Introduction to Doing Business in ASEAN 2017

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By: Dezan Shira & Associates

An Introduction to Doing Business in ASEAN 2017, the latest publication from Dezan Shira & Associates, is out now and available for complimentary download through the Asia Briefing Publication Store.

What happens in and around ASEAN is one of the key factors increasingly impacting upon China and India trade flows, as well as the rest of Asia. While the ASEAN trade bloc has been in existence since 1967, it has really shown its importance in trade and commercial business flows since the rise of China over the past three decades, and through its response to China’s changing domestic demographics. Those changes – an aging and increasingly consumer demanding China – have been skillfully adapted by ASEAN to place the future of global manufacturing, and where it takes place, firmly within its own orbit.

Simply put, free trade agreements that came into effect with China and India in 2010 changed the face of Asian trade and production, and are continuing to do so. For example, bilateral trade figures between China and ASEAN’s Big Five of Indonesia, Malaysia, Philippines, Singapore, and Thailand have multiplied by factors of 500 percent since the agreement was signed. With the smaller ASEAN nations of Cambodia, Laos, Myanmar and Vietnam coming into line with their own compliance of ASEAN customs duty reductions at the end of 2015, the entire bloc offers close to zero import-export tariffs for much of emerging Asia, including the giant markets of China and India, possessing some 500 million middle class consumers between them. ASEAN therefore represents a massive trade bloc possessing free trade agreements of global strategic importance. The question of accessing ASEAN for the benefit of North American, European and other global purchasing and manufacturing executives is a key function of this report.

An Introduction to Doing Business in ASEAN introduces the fundamentals of investing in the 10-nation ASEAN bloc, concentrating on economics, trade, corporate establishment and taxation. We also include the latest development news in our “Important Updates” section for each country, with the intent to provide an executive assessment of the varying component parts of ASEAN, assessing each member state and providing the most up-to-date economic and demographic data on each. Additional research and commentary on ASEAN’s relationships with China, India and Australia is also provided.

Includes:

  • An introduction to ASEAN 
  • Country profiles
  • Case studies: ASEAN as a platform for Asian growth

Our practice, Dezan Shira & Associates, has taken giant steps into the ASEAN market through the establishment of offices throughout the region, in addition to the creation of a unique alliance of firms. That, coupled with our existing long experience of handling foreign investment into China and India, puts us in a unique position of truly understanding how Asia works and how to maximize its free trade benefits.


About
 Us

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email asean@dezshira.com or visit www.dezshira.com.

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

 ‍

Related-Reading-Asean Book Title

dsa brochureDezan Shira & Associates Brochure
Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.


an_introduction_to_doing_business_in_asean_2017_-_image
An Introduction to Doing Business in ASEAN 2017
An Introduction to Doing Business in ASEAN 2017 introduces the fundamentals of investing in the 10-nation ASEAN bloc, concentrating on economics, trade, corporate establishment, and taxation. We also include the latest development news for each country, with the intent to provide an executive assessment of the varying component parts of ASEAN, assessing each member state and providing the most up-to-date economic and demographic data on each.



Human Resources in ASEANHuman Resources in ASEAN
In this issue of ASEAN Briefing, we discuss the prevailing structure of ASEAN’s labor markets and outline key considerations regarding wages and compliance at all levels of the value chain. We highlight comparative sentiment on labor markets within the region, showcase differences in cost and compliance between markets, and provide insight on the state of statutory social insurance obligations throughout the bloc. 

ASEAN Market Watch: Malaysia Export Growth, Indonesia-Saudi Arabia Relations, and Philippines AML Compliance

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Malaysia: Exports in January register strong growth

Malaysia’s exports in January accelerated from the previous month due to high shipments and strong demand from China. Exports rose 13.6 percent with a value of US$15.76 million from a year earlier, according to the Department of Statistics. Analysts say that global trade is also strengthening, with demand for manufactured products from China, Singapore, Indonesia, Thailand, and South Korea. Electrical and electronic goods, which account for more than one third of Malaysia’s exports, increased 11.4 percent from a year earlier, while palm oil and palm based products climbed 23 percent.

Exports to China, Malaysia’s largest trading partner, increased to 31.6 percent year-on-year in January, followed by 18.8 percent to Singapore. Analysts believe that demand for electronics will lessen in the second half of the year, slowing the country’s growth. However, the country’s central, Bank Negara Malaysia, stated that it expects stronger exports and steady domestic demand to keep up with economic growth.

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ASEAN Regulatory Brief: Philippines Banking Regulation, Cambodia SME Tax Incentive, and Indonesia Fintech Sector

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Philippines: Regulation holds banks responsible for late tax payments

The Department of Finance (DOF) on February 15 announced a new rule under the Bureau of Revenue (BIR) which will penalize banks and not taxpayers for late or unremitted tax payments made through credit, debit or prepaid cards. The regulations amends the Revenue Regulation (RR) No. 3-2016 which made taxpayers liable if their authorized agent bank (AAB) failed to pay the BIR their tax payment on time.

The regulation is mainly to benefit self-employed and small business owners who line up for several hours at BIR to pay taxes. As per the new rules, taxes paid by cards will be deemed already paid on the date and time shown on the confirmation receipt issued by AAB. The AAB will then be liable for any delays in depositing to the BIR. The DOF is also pursuing other tax reforms such as lowering personal income tax while raising excise tax and reducing value added tax (VAT)

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ASEAN Market Watch: Malaysia Manufacturing, Philippines Economic Freedoms, and Singapore SME Digitization

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Malaysia: “Most attractive manufacturing market” status retained

Malaysia retains the top position as the most attractive manufacturing market of choice for future relocations according to the new Cushman & Wakefield “Manufacturing Risk Index 2017” report. The “Manufacturing Risk Index” is an annual survey of the manufacturing sector, which considers investment policies, costs, and risks including political, economic, technological, and environmental risks for their assessment. Malaysia’s ranking is attributed to its infrastructure quality, trade, and logistics performance. 

The report also highlights Asia Pacific’s varying degrees of innovation such as automation and smart manufacturing which offers diversity for manufacturers. Almost half of the top 15 positions in the index are occupied by Asia Pacific countries. ASEAN countries such as Singapore, Thailand, Philippines, and Indonesia are ranked 12th, 14th, 19th, and 20th respectively. Based on the overall assessment, cost remains the most significant criteria for relocation currently, with further changes anticipated as the manufacturing industry moves to Industry 4.0, which incorporates automation and data exchange in manufacturing technologies.

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Investing in the Philippines: What to Expect in 2017

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By Alexander Chipman Koty

ManilaThe Philippines garnered substantial international attention in 2016, owing largely to President Rodrigo Duterte’s unexpected rise to power, his litany of controversial remarks, and contentious war on drugs campaign. Lost in the Philippines’ political drama, however, was the country’s strong economic performance. The Philippines posted a robust 6.8 percent GDP growth rate in 2016, outperforming popular investment spots such as China (6.7 percent) and Vietnam (6.2 percent). This follows years of sturdy growth under the previous Aquino administration, where growth averaged 6.2 percent per year.

FDI into the Philippines also increased in 2016, reaching US$6.2 billion in net inflows through the first 10 months of the year – a 22.2 percent increase over the US$5.1 billion accumulated over the same period the previous year. In 2015, total FDI amounted to US$5.7 billion. Intercompany borrowings accounted for almost two thirds of net FDI inflows (US$3.9 billion) in 2016, up 34.9 percent from US$2.9 billion in 2015. Despite improved FDI, the Philippines continues to lag behind fellow ASEAN countries such as Indonesia, Malaysia, and Thailand in this regard.

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ASEAN Regulatory Brief: Money Lending in the Philippines, Palm Oil Tax in Malaysia, and Visa Policy Review in Indonesia

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Philippines: Central bank tightens rules on money lending

In a move to fight money laundering, the Philippines’ central bank Bangko Sentral ng Pilipinas (BSP) tightened rules on money service businesses (MSBs). MSBs include remittance and transfer companies (RTCs), money changers, and foreign exchange dealers. As per the new rules, large payouts of more than US$10,036 (PHP 500,000) or its foreign currency equivalent in any single transaction with customers will only be allowed via check or direct credit to deposit accounts. Money changers and foreign exchange dealers will be allowed to sell foreign currency in an amount not exceeding US$10,000 and not exceeding US$50,000 per month per customer. Exemption will only be given once an application is made to the BSP depending on the nature of the business.

RTCs and MSBs will also need to notify the BSP when they commence operations as well as for new accreditation of remittance of sub-agents. The new rules will limit MSBs’ ability to transact in cash while also placing a cap on the amount of foreign currency that can be sold to money changers. The development comes after anti-money laundering investigators said that around US$81 million stolen from a Bangladesh central bank was transferred by a Philippines remittance company.

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ASEAN Market Watch: Renaming of MSCI Indexes, Growth in the Philippines, and Construction Boom in Cambodia

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MSCI South East Asia Index Offerings renamed MSCI ASEAN Indexes

MSCI, a US-based provider of equity, fixed income, and hedge fund stock market indexes has renamed its MSCI South East Asia Indexes to MSCI ASEAN Indexes. In addition, MSCI also added new indexes to represent the developed, emerging, and frontier markets in the ASEAN region. While MSCI ASEAN represents all the markets, MSCI EM ASEAN focuses on emerging markets, and MSCI EFM ASEAN represents emerging and frontier markets. The MSCI AC ASEAN index covers large and mid-cap equities across Singapore and four emerging markets, namely, Indonesia, Malaysia, Philippines, and Thailand.

MSCI was granted the right to use the ASEAN designation for their index offering from the ASEAN Secretariat. The members of the ASEAN exchanges include seven exchanges across Singapore, Indonesia, Malaysia, Philippines, Thailand, and Vietnam. The rebranding of the indexes reflects the development of ASEAN members as a region of sustained growth and economic development. The change will offer global investors a deeper understanding of the various investment opportunities in the region and allows the member countries to promote their capital markets.

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ASEAN Market Watch: Indonesia Seeks Engineers, ASEAN ICT Masterplan, and Singapore-Malaysia High Speed Rail

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Indonesia faces shortage of engineers

Indonesia’s annual shortage of around 30,000 engineers is becoming a key obstacle to its infrastructure development plans. Currently, Indonesia has 57 million skilled workers but it would need 113 million by 2030 to meet the country’s requirements. Around 20 percent of Indonesia’s six million university and postgraduate students pursue Islamic studies, with most students ending up with unrelated jobs.

According to a 2015 national labor force survey, less than ten percent of Indonesia’s 250 million citizens have a university-level education. Of those, only eight percent choose an engineering study and more than half of these graduates work in different fields, such as banking. The government believes that the country needs a more skilled workforce if they are to keep up with other ASEAN countries and meet the Master Plan for Acceleration and Expansion of Indonesia’s Economic Development’s (MP3EI 2025) ambitious targets, which will be difficult to achieve with substantial infrastructure gaps.

Achieving Indonesia’s infrastructure development goals, which range from sea projects, airports, highways, and power plants, necessitates a technical workforce. The government is taking steps to establish more industry-oriented engineering colleges, technical institutes, and state-funded scholarships. The last few years have seen improvements, with 57 percent of Indonesians completing education after primary school in 2015, compared to 40 percent in 2002. Furthermore, the share of college-age Indonesians attending universities has risen from 20 percent to 25 percent over the last decade. However, economists believe that Indonesia still needs to do more to meet its infrastructure development goals by 2025.

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ASEAN Regulatory Brief: Philippines Contractualization Law, Cambodia Customs Seal, and Malaysia Foreign Worker Levy

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Philippines: Policy on labor contractualization approved

The Philippines government approved a new Department of Labor and Employment (DOLE) regulation, Order No. 168 on contractualization, after it was submitted on December 29, 2016. The new law amends the provisions of the labor code and legalizes subcontracting or outsourcing labor through third party agencies. This will allow principal employers to hire contractual labor, but only through service providers. These providers will be responsible for regularizing workers rather than the employer. Higher financial requirements will be imposed on service providers to eliminate unreliable subcontractors and ensure payments for laborers. The government believes that the change will address issues of labor abuse.

Several labor groups have opposed the directives, believing the change will only further legitimize contractualization in a different form and not eliminate it. The groups are lobbying for direct hiring and to prohibit third party hiring by banning fixed-term employment. They have asked President Rodrigo Duterte not to implement the directive and to issue an order banning all forms of fixed employment contracts, thereby fulfilling his campaign promise of eliminating contractualization. In the first five months of Duterte’s term, the government regularized 25,000 contractual workers, which is less than 10 percent of the total workforce.

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