As the Regional Comprehensive Economic Partnership (RCEP) will enter into force in the Philippines on June 2, financial technology firm First Circle said the free trade agreement (FTA) will allow Filipino micro, small and medium enterprises (MSMEs) to be integrated in the global value chain.
In a statement Tuesday, First Circle vice president Benedict Carandang said compared to their counterparts in Southeast Asia, local MSMEs struggle to link their products and services in the global value chain.
“By reducing and eliminating trade barriers, the RCEP opens up cross-border trade opportunities for Philippine SMEs,” he said.
Carandang said smaller enterprises should take advantage of the benefits of RCEP, and explore ways to sell their products and services to the 2.3 billion market of the new trade bloc.
“This unprecedented access to a combined market of 2.3 billion consumers allows SMEs to diversify their customer portfolios, reduce dependency on traditional markets, and acquire certifications that boost their competitiveness. SMEs also benefit from exposure to advanced technologies, a wider pool of talent, best practices from more developed economies, and new regional partners and investor,” he added.
Carandang said First Circle has partnered with the Department of Trade and Industry (DTI) since 2016 to provide capacity-building program and financial access to SMEs.
“Their innovative financing solution, the Revolving Credit Line, provides non-collateral financing that’s free to open, free to maintain, and requires no commitment to use. This allows SMEs to access up to PHP20 million in credit, which they can use to seize global opportunities, expand business operations, or mitigate risks and cash flow gaps,” he said.
Senate concurred with the ratification of RCEP, making the Philippines the last country among 15 RCEP signatories to implement the preferential tariff deal. The trade deal was ratified last February.
RCEP is now the world’s largest FTA covering one-third of the globe’s population. The 15 countries’ combined gross domestic product also comprised one-third of the world’s economy. (PNA)
