Potential Effects of the Regional Comprehensive Economic Partnership (RCEP) on the Philippine Milkfish Industry

Date

6-2023

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Charis Mae T. Neric

Committee Member

Julieta A. Delos Reyes, Agham C. Cuevas

Abstract

The Regional Comprehensive Economic Partnership (RCEP) is expected to be the largest trading bloc in the world as it facilitates trade partnerships with the ASEAN, China, Japan, South Korea, Australia, and New Zealand. There are numerous studies evaluating the effects of RCEP on different countries, however, few to none focus on its effects on the Philippines' agri-fisheries industry, especially the possible risks, threats, and corresponding safety nets that local producers can expect and anticipate under the agreement. With this, the study adopts an ex-ante analysis in investigating the effects of RCEP's trade liberalization on the Philippine milkfish industry and the context in which it operates.

In analyzing the comparative advantage of Philippine milkfish under the import and export-trade scenario, the Domestic Resource Cost (DRC) values of 30 milkfish grow-out pond producers in barangays San Pablo, Sta. Elena, and Sagrada Familia in Hagonoy, Bulacan show that extensive, semi extensive, and intensive milkfish production systems can satisfy local demands, diminishing the need for imports. On the other hand, only the intensive production system showed a comparative advantage when it comes to milkfish exports, implying a need to improve local production by decreasing production costs to strengthen the comparative advantage of other production systems.

Partial equilibrium analysis of the industry using Tsakok's (1990) method showed that trade liberalization under RCEP will decrease domestic prices and domestic production by 0.09 percent and 41 thousand mt respectively. Meanwhile, the local consumption will increase by 85 thousand mt and imports by 126 thousand mt/ Welfare effects show that the trade agreement will reduce changes in government revenue, changes in consumer and producer surplus, net economic loss in consumption and production, and total loss to society to 0, implying welfare maximation or the optimal allocation or resources.

The Philippine milkfish industry can expect the following risks and threats in the international market: the expected increase in imports which may exacerbate the decreasing fisheries output from 2020 to 2023, import dependency on Indonesia for milkfish fry, the limited foreign market demand for milkfish and the noncompliance to SPS measures. On the other hand, producers can find opportunities and safety nets under BFAR's Bangus Fry Sufficiency Program and the National Bangus Development Program, and the vertical integration of the industry.

The study recommends a continued commitment to the National Bangus Development Program, improvement of compliance to SPS measures, expansion of milkfish product forms for export, and the organization of milkfish producers and operators. Theses recommendations focus on strengthening the comparative advantage of local producers and increasing their bargaining power to make trade agreements such as RCEP advantageous for agricultural producers as well.

Language

English

LC Subject

Milkfish industry, Convergence (Economics)

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2023 A14 C34

Notes

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Document Type

Thesis

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