Secretary Arsenio M. Balisacan
Socioeconomic Planning Secretary and NEDA Director General
Regional Conference of Services Coalitions
“Charting a New Course on Services: A Call to Action in APEC”
7 September 2015
Senior Officials of APEC Member Economies, Delegates, Representatives of Various Services Coalitions in the APEC, Guests, Ladies and Gentlemen, good morning.
Allow me to congratulate APEC Business Advisory Council (ABAC), the Pacific Economic Cooperation Council (PECC) and the Office of the SOM Chair for organizing this pioneering event. This is a unique opportunity for APEC officials, business leaders, small enterprises, users of services, and services organizations to explore ways to maximize the full potential of the services sector, as part of the global value chain.
As you know, the Philippines hosted Public-Private Dialogues (PPDs) on Services in Clark and in Boracay in February and May this year. The first PPD featured developments, challenges and opportunities in Information Technology and Business Process Management, Creative Industries, and Research and Development Services, while the second PPD covered Manufacturing, Environment, and Agriculture-related Services, as well as the role of services in achieving inclusive growth. These PPDs, which were started in 2013 by Indonesia in cooperation with ABAC and PECC, aim to broaden the base for consultation and facilitate the sharing of regulatory experiences and challenges. At the same time, they aim to generate views on ways to improve services competitiveness. Through these PPDs, a number of valuable recommendations have been made.
Later this afternoon, we will convene the Second Structural Reform Ministers’ Meeting, which the Philippines will chair. Among the themes to be discussed is Services and Structural Reform which will take off from the paper prepared jointly by the Philippines, Australia, and Peru. The paper focuses on the increasing importance of services within APEC economies, the need for structural reform, challenges currently confronted by the sector, and what APEC can do to address these issues.
The services sector is a major contributor to output and productivity growth. The sector – which includes telecommunications, e-commerce, transportation, finance and banking, engineering, construction, legal, healthcare and education services – accounts for two-thirds of the combined GDP of APEC economies and almost 71 percent of global GDP. Technological progress, especially in transport and information and communications technology, has transformed business practices, where innovations have reduced the cost, increased the speed, improved the quality, and expanded the range of products that are traded domestically and across borders. These innovations are particularly beneficial to small and medium-sized (SME) enterprises or firms.
Services also absorbs a significant share the workforce. In the Philippines, the sector account for 54 percent of total employment or around 21 million Filipinos. This is important at a time when APEC economies are facing an environment of slower global economic growth, slower potential growth, and relatively weak business investment.
But the services sector faces unique and significant barriers that, in many cases, are regulatory in nature. If a regulation is too restrictive and prescriptive, then it will hinder innovation. To have effective services trade reform, it will be necessary to balance competing objectives, which include, first, enhancing competition or contestability of markets; second, ensuring effective regulation to deal with market failures to promote efficiency; and third, attainment of social objectives to promote equity.
We welcome the recommendation of the ABAC for the Structural Reform Ministers to address behind-the-border barriers to services that reduce competition and restrict investment options. Likewise, we welcome the ABAC’s support for the development of an APEC Services Cooperation Framework to be endorsed by the APEC Leaders in November. The Philippine initiative aims to provide a common direction and more coherence in APEC’s work on services. This direction must ensure that APEC’s multi-fora and multi-stakeholder services agenda remains responsive to technological developments and evolving business realities.
Also to be launched in today’s conference is the APEC Coalition of Services Organizations. This Coalition will seek to provide a voice to services stakeholders, and promote a broader understanding of the vast opportunities and the essential measures that need to be considered to realize substantial gains from the sector.
As we proceed with this morning’s sessions, we encourage all stakeholders to continue to dialogue to build economies’ capacities to promote an enabling environment for services trade and investment, as well as improve the competitiveness of our services sectors to meet the Bogor Goals and strengthen regional economic integration.
Thank you, and may we all have a productive conference.
 As of 2011 data. Source: Stats APEC.