1 Surviving the ASEAN Integration CIRILO C. CALIBJO, Ph.D., PEE, ACPE 2012 IIEE-WV Regional Governor 2013 IIEE ACPER Committee Chair IIEE AAPER Committee Chair Member, PTC-PEV, Washington Accord Dean, CCS, Central Philippine Univ.
2 OUTLINE I. INTRODUCTION II. BACKGROUND ON ASEAN III. FRAMEWORK IV. ASEAN ECONOMY AND MOBILITY AREA: PHILIPPINES IN FOCUS V. FRAMEWORK FOR MOBILITY IN THE AEC VI. PHILIPPINES IN FOCUS VII. ACHIEVING MOBILITY IN AEC VIII. POLICY RECOMMENDATIONS IX. CONCLUSION
3 OBJECTIVES 1. Investigate the scope of free flow of services and free flow of skilled labor 2. Make an inventory Philippine policies and regulations 3. Determine readiness of the Philippine policy and regulatory framework 4. Recommend strategies for managing transition
4 BACKGROUND ON ASEAN
5 Established in 1967 Composed of 10 member states: Brunei Darussalam Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam Adopted of the ASEAN Charter in 2007 Adopted the Declaration of ASEAN Concord, also known as Bali Concord II in 2003
6 Three Pillars of the ASEAN Community
8 ASEAN Economic Community Building To create a single market and production base o Stable o Prosperous o highly competitive o economically integrated
9 ASEAN Economic Community Building To create a single market and production base o effective facilitation for trade and investment o free flow of goods, services and investment o facilitated movement of business persons, professionals, talents and labor; o freer flow of capital.
10 ASEAN ECONOMIC COMMUNITY
11 ASEAN ECONOMIC COMMUNITY 2015 SINGLE MARKET AND PRODUCTION BASE Free flow of professional services Source: Free Free flow of goods flow of goods Free flow of of investm ent Free flow investment Free flow of capital Free flow of Free flow of skilled labor workers
12 AEC Blueprint: Commitments A2. Free flow of services 20. there will be substantially no restriction to ASEAN services suppliers in providing services and in establishing companies across national borders within the region, subject to domestic regulations.
13 AEC Blueprint: Commitments 21. recognition of professional qualifications Actions: i. Remove substantially all restrictions on trade in services: air transport e-asean healthcare and Tourism logistics services
14 AEC Blueprint: Commitments 21. recognition of professional qualifications Actions: ii. Remove substantially all restrictions on trade in services for all other services sectors by 2015; iii. Undertake liberalization through consecutive rounds of every two years until 2015;
15 AEC Blueprint: Commitments 21. recognition of professional qualifications Actions: iv. Target to schedule minimum numbers of new sub-sectors for each round: 10 sub-sectors in 2008, 15 in in in in 2015
16 AEC Blueprint: Commitments 21. recognition of professional qualifications Actions: v. Schedule packages of commitments: No restrictions for Modes 1 and 2; Allow for foreign (ASEAN) equity participation Progressively remove other Mode 3 market access limitations by 2015;
17 AEC Blueprint: Commitments vi. Set the parameters of liberalization for national treatment limitations, Mode 4 and limitations; vii. Schedule commitments according to agreed parameters for national treatment limitations, Mode 4 and limitations; viii.complete the compilation of an inventory of barriers to services;
18 AEC Blueprint: Commitments ix. Allow for overall flexibilities ix. 2, which cover the sub-sectors totally excluded from liberalization and the sub-sectors in which not all the agreed parameters of liberalization of the modes of supply are met, in scheduling liberalization commitments.
19 AEC Blueprint: Commitments The scheduling of liberalization commitments in each round shall be accorded with the following flexibilities: Possibility of catching up in the next round; Allowing for substituting sub-sectors; and Liberalization through the ASEAN Minus X formula.
20 AEC Blueprint: Commitments Complete MRAs currently under negotiation; Implement the MRAs expeditiously; Identify and develop MRAs for other professional services; and Strengthen human resource development and capacity building in the area of services.
21 AEC Blueprint: Commitments For the financial services sector, 22. should allow members to ensure orderly financial sector development and maintenance of financial and socio-economic stability. Principles in pacing liberalization measures: a) Liberalization through ASEAN Minus X formula; and b) The process of liberalization should take place with due respect for national policy objectives and the level of economic and financial sector development.
22 AEC Blueprint: Commitments Actions: i. Progressively liberalize restrictions in subsectors or modes as identified by each member country by 2015; and ii. Progressively liberalize restrictions in the remaining sub-sectors or modes, which are not identified under pre-agreed flexibilities, by 2020
23 AEC Blueprint: Commitments A5. Free flow of skilled labor 33. ASEAN is working to: Action: i. Facilitate the issuance of visas and employment passes for ASEAN professionals and skilled labor who are engaged in crossborder trade and investment related activities.
24 AEC Blueprint: Commitments 34. harmonization and standardization, to facilitate their movement within the region. Actions: i. Enhance cooperation among ASEAN University Network (AUN) members; ii. Develop core competencies and qualifications; and iii. Strengthen the research capabilities
26 According to the Human Development Report (HDR) (United Nations Development Programme [UNDP], 2009) international migrants worldwide have ballooned to 200 million worldwide internal migrants, or migrants who do not cross national borders, are now at estimated 740 million.
27 What is the kind of movement that has the highest development benefit? HDR 2009 argues that people reaps the best benefits when they move in conditions of freedom. This is defined as human mobility or the ability and freedom of a person to move to a destination that one wants, as opposed to movement, which is the act of changing one s place of residence.
28 the absence of formal restrictions on the movement of people across or within borders does not in itself make people free to move if they lack the economic resources, security and networks necessary to enjoy a decent life in their new home, or if informal constraints such as discrimination significantly impede the prospects of moving successfully The ideal movement is movement that is free.
29 Three pathways to international mobility for Filipinos residing in the Philippines (Tabladillo, 2010): 1) overseas employment; 2) mode 4 of trade in services (movement of natural persons); and 3) alternative modes of entry including working holiday scheme, cultural exchange and education or training exchanges.
30 overseas employment may afford protective mechanisms a pathway for employment or work; mode 4 of trade in services protection-neutral does not permit entry to the labor market for employment purposes. alternative modes protection-neutral
31 Virtually all the known pathways to international mobility do not afford free movement or total mobility. They are all what can be described as managed movement or managed mobility.
32 Arguments on mobility: 1) that mobility does not have to be absolute or totally free, but it should also not be too restrictive, and 2) there are many pathways that can be blended to ensure greater mobility for Filipinos.
33 ASEAN ECONOMY AND MOBILITY AREA: PHILIPPINES IN FOCUS
34 ASEAN ECONOMY AND MOBILITY AREA: PHILIPPINES IN FOCUS Stock of suppliers ASEAN total land area = million sq. km. ASEAN total population of million in 2010 ASEAN population will expand to million in % of Working-age persons at 25 to 54 (ASEAN Secretariat, 2011) ASEAN economies will continue to expand by an annual average 10% in (Grant Thornton International Business, 2012)
35 ASEAN POPULATION Member Total Population (000) Total Population Aged (000) Share of Pop Aged to Total (%) ASEAN 571, , , , Brunei Cambodia 14,444 16,641 4,658 6, Indonesia 231, ,567 97, , Lao PDR 5,859 6,699 1,896 2, Malaysia 26,572 30,047 10,575 12, Myanmar 48,798 51,998 20,907 23, Philippines 87, ,090 31,326 37, Singapore 4,436 4,809 2,144 2, Thailand 63,884 66,763 29,477 29, Vietnam 87,375 96,467 35,539 42, *2015 figures are projections Source: International Labour Organization (2008)
37 ASEAN EMPLOYMENT BY SECTOR Indicator Agriculture Industry Services Employment growth (000) ( ) Employment growth (%) (2007) Share to total employment (%) (2007) 2, , , Source: ASEAN Secretariat (2010). ASEAN Statistical Yearbook 2010
38 INTRA-ASEAN MIGRATION Intra-ASEAN Migration Member Outward Inward Ratio Brunei 9, , Cambodia 53, , Indonesia 1,518, , Lao PDR 82,788 10, Malaysia 1,195,566 1,882, Myanmar 321, Philippines 335,407 9, Singapore 122,254 1,162, Thailand 262, , Vietnam 221,956 21, TOTAL 4,123,515 4,135, Notes: all data are based on data estimates of World Bank released in 2010, except that for Myanmar which are based on estimates for Source: Pasadilla (2007)
39 INTRA-ASEAN MIGRATION cont d Member Total Migration Share of Intra to Total Outward Inward Ratio Outward Inward Brunei 24, , Cambodia 350, , Indonesia 2,504, , Lao PDR 366,663 18, Malaysia 1,481,202 2,357, Myanmar 514,667 98, Philippines 4,275, , Singapore 297,234 1,966, Thailand 811,123 1,157, Vietnam 2,226,401 69, TOTAL 12,852,027 6,984, Notes: all data are based on data estimates of World Bank released in 2010, except that for Myanmar which are based on estimates for Source: Pasadilla (2007)
40 REs in the ASEAN Region (May 2015) Economies Registered Engineers %RE Brunei Cambodia Indonesia 340, Lao, PDR n.a. n.a. Malaysia 10, Myanmar 42, Philippines 403, Singapore 1, Thailand 135, Vietnam 125, Total 1,061,603 Source: Creating and Nurturing Service, Salvador P. Castro, Jr
41 ASEAN Registered Engineers as of July 2015 Economies ASEAN Engineers %AE REs %AE/RE Brunei Cambodia Indonesia , Lao, PDR n.a. Malaysia , Myanmar , Philippines , Singapore , Thailand , Vietnam , Total 1,685 1,061,
42 ACPE Registered Engineers as of July 2015 Economies ACPE Engineers %AcE REs %AcE/RE Brunei Cambodia Indonesia , Lao, PDR n.a. Malaysia , Myanmar , Philippines , Singapore , Thailand , Vietnam , Total ,061, Source:
43 FRAMEWORK FOR MOBILITY IN THE ASEAN ECONOMIC COMMUNITY
44 The ASEAN Economic Community and its Pillars
45 The concept of free flow is not absolute, total or full. Free flow managed flow through regional rules subject to domestic or national laws and regulations. freer or faster implementation of commitments from previous agreements or frameworks.
46 The ASEAN Economic Community will just build on, or accelerate, previous initiatives for community building, including the initiative for trade in services liberalization under the ASEAN Framework Agreement on Services (AFAS) and ASEAN Mutual Recognition Agreements (MRAs).
47 ASEAN Framework Agreement on Services ASEAN Framework Agreement on Services aims: 1. enhance cooperation in services among ASEAN Member States; 2. eliminate substantial barriers to trade in services; and 3. liberalize trade in services
48 Packages of Commitment 8 packages on business and professional services 5 packages on financial services 7 packages for air transport services
49 GATS Four (4) Modes of Supply Cross-boarder Trade 1 Consumption Abroad 2 Commercial Presence 3 Presence of Natural Persons 4
50 MODES Member A The 1 st Mode of Supply Member B Supply of a service from the territory of one Member into the territory of any other Member Service supplier MODE 1 CROSS-BORDER TRADE Service consumer WTO/OMC
51 MODES Member A The 2 nd Mode of Supply Member B Supply of a service in the territory of one Member to the service consumer of any other Member Service supplier MODE 2 CONSUMPTION ABROAD WTO/OMC Service consumer
52 MODES Member A The 3 rd Mode of Supply Member B $ Supply of a service by a service supplier of one Member, through commercial presence in the territory of any other Member Service supplier MODE 3 COMMERCIAL PRESENCE Service consumer WTO/OMC
53 MODES Member A The 4 th Mode of Supply Member B Supply of a service by a service supplier of a Member, through presence of natural persons of a Member in the territory of any other Member Service supplier MODE 4 PRESENCE OF NATURAL PERSON WTO/OMC i.e. Experts, Consultants & Lecturers Service consumer
54 AFAS classification of services sectors under GATS 1. Business Services 2. Communication Services 3. Construction and Related Engineering Services 4. Distribution Services 5. Educational Services 6. Environmental Services
55 AFAS classification of services sectors under GATS 7. Financial Services 8. Health Related and Social Services 9. Tourism and Travel related Services 10. Recreational, Cultural and Sporting Services 11. Transport Services 12. Other Services Not Included Elsewhere.
56 Mutual Recognition Arrangements (MRAs) Mutual recognition of training or professional qualifications to promote the international mobility of workers or in service suppliers. Equivalence to assesses regulatory objectives
57 Mutual Recognition Arrangements (MRAs) Limitations o recognition is not automatic o set out processes for the determination of standards and other requirements for recognition
58 Mutual Recognition Arrangements (MRAs) Effect o Recognition does not automatically confer right to exercise a profession, as market access must be granted. o Recognition can exclude some professions or skills.
59 Mutual Recognition Arrangements (MRAs) Effect Capacity or eligibility to work after recognition will be subject to the following principles: must meet requirements in his home country, including years of education, acquisition and other capacities must meet the requirements of domestic laws and regulations must follow rules for professional conduct must continuously comply with professional standards.
60 ASEAN MRAs 1. Engineering services - recognition for registered ASEAN engineers; 2. Architectural services same as engineering 3. Nursing services exchange of expertise, experience and best practices 4. Medical practitioners bilateral registration processes 5. Dental practitioners same as medical practitioners 6. Accountancy services same as medical practitioners 7. Surveying Qualifications lays down broad principles and framework for negotiating MRAs
61 PHILIPPINES IN FOCUS Policy and Legal Framework for Inward and Outward International Mobility: Philippines
62 Inward Mobility: Policy Protection for the Filipino Labor; preference for Filipino labor Philippine Constitution of 1987, Art. XII: Section 12. The state shall promote the preferential use of Filipino labor, domestic material and locally produced goods, and adopt measures that help make them competitive.
63 Inward Mobility: Policy Section 14. The State shall encourage appropriate technology and regulate its transfer for the national benefit. The practice of all professions in the Philippines shall be limited to Filipino citizens, save in cases prescribed by law.
64 Inward Mobility: Entry and Stay Visas/Departure Pre-Arranged Employment Visa Treaty Trader Visa Special non-immigrant visa Special multiple entry visas Special Subic Working Visa Special Clark Working Visa executive, technical, managerial or highly confidential position foreign investor public interest or public policy considerations foreign personnel of offshore banking units of foreign banks foreign nationals employed by the Subic Bay Freeport Locators. foreign nationals employed by the Clark Special Economic Zone Locators
65 Inward Mobility: Entry and Stay Visas/ Departure Special Investor s Resident Visa Special Investor Resident Visa Special Subic Investor s Visa Special Clark Investor s Visa Special Resident Retiree s Visa Foreign Investor investors in tourist related projects and tourist establishments investment of not less than US$250, within the Subic Bay Freeport (SBF) investment of not less than US$250, within the Clark Special Economic Zone Foreign Retirees
66 Inward Mobility: Labor Market Test Article 40, Paragraph 2 of the Labor Code of the Philippines, as amended states that an employment permit may be issued to a nonresident alien or to the applicant employer after a determination of the non-availability of a person in the Philippines who is competent, able, and willing at the time of application to perform the services for which the alien is desired.
67 Inward Mobility: Employment Permits/Passes Employment Permit for Foreign Nationals Coverage. Foreign nationals required to apply for an AEP a) Foreign nationals seeking employment in the Philippines whether they are non-residents or refugees; b) Foreign professionals who are allowed to practice their profession in the Philippines under reciprocity and other international agreements and in consultancy services pursuant to Section 7(j) of the PRC Modernization Act of 2000.
68 Inward Mobility: Employment Permits/Passes c) Holders of Special Investors Resident Visa (SIRV), Special Retirees Resident Visa (SRRV), Treaty Traders Visa (9d) or Special Non- Immigrant Visa (47(a)2) for as long as they occupy any executive, advisory, supervisory, or technical position in any establishment.
69 Inward Mobility: Employment Permits/Passes Exemption by law permanent resident foreign nationals, owners and representatives of principals whose companies are accredited by the POEA for the purpose of conducting interviews with Filipino applicants for employment abroad,
70 Inward Mobility: Employment Permits/Passes Exemption by law foreign nationals who are members of the Governing Board and do not necessarily occupy any other position but have only voting rights in the corporation, and foreign nationals who come to the Philippines for teaching and research purposes.
71 Inward Mobility: Employment Permits/Passes Issuance of Certificates of Registration or Special Temporary Permits for professionals who will practice professions in the Philippines (PRC Resolution , Series of 2012 pursuant to the PRC Modernization Act of 2000)
72 Inward Mobility: Qualification Requirements Reciprocity. Foreigners may be allowed to practice in the Philippines provided the same treatment is accorded to Filipino professionals in the alien's home country under the principle of reciprocity
73 Inward Mobility: Technology Transfer A registered enterprise may be allowed to employ foreign nationals in supervisory, technical or advisory positions for five (5) years from date of registration, extendible for limited periods. The positions of President, General Manager and Treasurer of foreign- owned registered enterprises (more than 40%) or their equivalent shall, however, not be subject to the foregoing limitations.
74 Inward Mobility: Technology Transfer Commonwealth Act 108, as amended by PD 715 Section 2a, otherwise known as the Anti-Dummy Law states that foreign nationals are allowed only in technical positions in enterprises where foreign equity participation is limited by law or Constitution to a maximum of 40%.
75 Outward Mobility: Policy The State adopts a policy for protecting workers, located in the Philippines or abroad. State shall, at all times, uphold the dignity of its citizens whether in country or overseas, in general, and Filipino migrant workers, in particular, continuously monitor international conventions, adopt/be signatory to and ratify those that guarantee protection to our migrant workers, and endeavor to enter into bilateral agreements with countries hosting overseas Filipino workers. (Migrant Workers Act as amended)
76 Outward Mobility: Entry and Stay Visas/Departure Employment contract processing Pre-departure orientation Ban or moratorium of travel or departure for a country deemed unsafe for Filipinos, if found non-compliant with three criteria set by the Migrant Workers Act as amended: 1) It has existing labor and social laws protecting the rights of workers, including migrant workers; 2) It is a signatory to and/or a ratifier of multilateral conventions, declarations or resolutions relating to the protection of workers, including migrant workers; and
77 Outward Mobility: Entry and Stay Visas/Departure 3) it has concluded a bilateral agreement or arrangement with the government on the protection of the rights of overseas Filipino Workers: Provided, That the receiving country is taking positive, concrete measures to protect the rights of migrant workers in furtherance of any of the three guarantees Other conditions for departure may also be set according to terms of bilateral labor agreements between the Philippines and the destination country.
78 Outward Mobility: Employment Permits/Passes An Overseas Employment Certificate (OEC) is a requirement under POEA Rules and Regulations to help ensure that OFWs are properly documented and protected
80 Outward Mobility: Technology Transfer Reintegration system Sources: 1987 Philippine Constitution; various laws as indicated; Board of Investments (n.d.). Primer for Doing Business; Yue (2012)
81 ACHIEVING MOBILITY IN AEC
82 Implementation of the AEC Scorecard by Country Progress in Implementation Full implementation Partial Implementation Phase I ( ) Phase II ( ) Free Flow of Services Free Flow of Skilled Labor Free Flow of Services Free Flow of Skilled Labor N/A / / N/A / Note: Full - all measures targeted were implemented Partial more than half of the measures targeted in the area have been implemented Slow less than half of the measures have been implemented Source: AEC Scorecard 2011
83 Philippine Readiness for Priority AEC actions Priority AEC Actions Free flow of services Set the parameters of liberalization for national treatment limitations, Mode 4 and limitations in the horizontal commitments for each round (2009) Schedule commitments according to agreed parameters for national treatment limitations, Mode 4 and limitations in the horizontal commitments set in Readiness of Philippine Laws/Regulations High The ASEAN Agreement on Movement of Natural Persons has been approved and it will be used as the framework for subsequent scheduling of commitments Prospects Scheduling of commitments under ASEAN Agreement on Movement of Natural Person aligned with AEC requirements
84 Philippine Readiness for Priority AEC actions Priority AEC Actions Remove substantially all restrictions on trade in services for the 4 priority services sectors (2010) Remove substantially all restrictions on trade in services for logistics services by 2013 Remove substantially all restrictions on trade in services for all other services sectors by 2015 Readiness of Philippine Laws/Regulations Weak The Constitution limits practice of profession to Filipinos save in cases of reciprocity as provided by law Low prospect for amendment of restrictive laws particularly on the labor market test and visa systems Prospects Replacing the employment permit system with the positive list approach, where a list of occupations or skills in huge shortage will be issued through consultations and research. The new system may ease the restrictiveness of the law through administrative reform
85 Philippine Readiness for Priority AEC actions Priority AEC Actions Mutual Recognition Arrangements (MRAs) Complete MRAs currently under negotiation, i.e. engineering services, architectural services, accountancy services, surveying qualifications, medical practitioners, and dental practitioners (2008). Readiness of Philippine Laws/Regulations High Full compliance according to AEC Scorecard, Prospects The Philippines has signed all the seven MRAs
86 Philippine Readiness for Priority AEC actions Priority AEC Actions Implement the completed MRAs Full implementation of completed MRAs (2015) Readiness of Philippine Laws/Regulations Moderate Prospects Recognition requires readiness in content and procedures. The PRC has made progress in improving the professional sectors through a strategic planning.
87 Philippine Readiness for Priority AEC actions Priority AEC Actions Free flow of skilled labor Develop core competencies (concordance of skills and qualifications) for job/occupational skills required in the priority services sectors by 2009 Develop core competencies (concordance of skills and qualifications) for job/occupational skills required in all services sectors by 2015 Readiness of Philippine Laws/Regulations High EO No 83 institutionalizes the PQF to adopt a national standards and levels for outcomes of education; support the development and maintenance of pathways for portability of education units and training certificates earned across higher education and training institutions; Prospects The Philippines has taken a lead role in the process, chairing the meeting of ASEAN Task Force on the National Qualifications Framework in Thailand in 2012
88 Philippine Readiness for Priority AEC actions Priority AEC Actions Free flow of skilled labor Develop core competencies (concordance of skills and qualifications) for job/occupational skills required in the priority services sectors by 2009 Develop core competencies (concordance of skills and qualifications) for job/occupational skills required in all services sectors by 2015 Readiness of Philippine Laws/Regulations and align the national qualification system with international frameworks to promote international mobility of Filipinos and increase value, comparability and recognition of their qualification Prospects The Philippines has taken a lead role in the process, chairing the meeting of ASEAN Task Force on the National Qualifications Framework in Thailand this year (2012)
89 POLICY RECOMMENDATIONS
96 Economic growth is in the ASEAN Region. We must take advantage of these opportunities but must be prepared and ready to face the competition and challenges. We must identify our strengths and work out our niches in engineering services. With intense competition with other ASEAN engineers, we must change our work culture, forget about the routine style of working.
97 However, the first step is to secure our Entry Visa. ASEAN MARKET Passport Entry Visa - PRC Professional License - ASEAN Engineer - ASEAN Chartered Professional Engineer
98 ASEAN Engineer ASEAN Chartered Professional Engineer
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