THE Philippines has yet to fully capitalize on the Regional Comprehensive Economic Partnership (RCEP), lagging behind regional peers as low awareness among small businesses and weak implementation continue to limit the country’s gains from the world’s largest free trade agreement, an industry leader said.
Jay Yuvallos, chairman of the East Asia Business Council (EABC) Philippines, said countries such as China, Japan, South Korea, Vietnam, Thailand and Malaysia have been more aggressive in utilizing RCEP since the trade pact took effect in 2022, while Philippine firms — particularly micro, small and medium enterprises (MSMEs) — have yet to fully tap its opportunities.
“If you look at the numbers that we monitor in the council, it is always China, Japan and Korea, followed by more aggressive Asean countries like Vietnam, Thailand and Malaysia,” Yuvallos said in an interview.
“The Philippines has a lack of awareness and a lack of a more aggressive push,” he added.
RCEP has the potential to unlock significant opportunities for businesses across East Asia. Covering about one-third of the world’s economy and nearly half of its population, the trade agreement brings together the 10 Asean member states with China, Japan, South Korea, Australia and New Zealand under a single framework that simplifies market access, harmonizes rules of origin, and strengthens investment and intellectual property protections.
Together, RCEP economies generate about 30 percent of global gross domestic product and account for more than a quarter of world exports, creating one of the world’s largest integrated trading blocs and expanding opportunities for businesses to tap regional markets and strengthen supply chains.
MSMEs require greater awareness
Yuvallos said the agreement presents significant opportunities for smaller Philippine enterprises, but many remain unfamiliar with its provisions and how they can benefit from them.
“The main thrust is to make it more inclusive so that the smaller ones can participate,” he said.
Unlike large exporters that already have the resources to navigate international trade rules, MSMEs require greater awareness, training and technical assistance to take advantage of preferential tariffs, investment provisions and regional supply chains, he said.
Beyond exports, Yuvallos said Philippine businesses should view RCEP as an opportunity to participate in regional value chains by supplying components, services and intermediate goods to larger manufacturers.
“You don’t need to be an exporter to participate in the RCEP economy,” he said.
He cited Malaysia’s vendor acceleration program, which integrates small businesses into supply chains serving export-oriented manufacturers, as a model the Philippines could adopt.
“They may not be direct exporters, but they are part of the value chain participating in production,” he said.
Integrated ecosystems
Meanwhile, the EABC is also advocating a broader “East Asia Connect” initiative that seeks to map existing regional value chains and identify opportunities for more Philippine firms to participate.
Yuvallos said the country should shift from pursuing isolated investment projects to developing integrated industrial ecosystems similar to those in Thailand and China, where manufacturers, suppliers, logistics providers and infrastructure are clustered together to improve competitiveness.
“We have to look at Cebu as an ecosystem,” he said, when asked about how Cebu can take advantage of the initiative. “Other countries are already thinking like this.”
Regional support unit
To expand awareness of the trade agreement, the EABC and the Cebu Chamber of Commerce and Industry have partnered with the Department of Trade and Industry to establish a Regional Support Unit that will assist businesses in understanding and using RCEP.
The initiative will complement the first RCEP Business and Investment Summit, which will be held on Sept. 9, 2026 in Taguig City, alongside the Management Association of the Philippines’
International CEO Conference.
Yuvallos said broader participation by MSMEs will be critical if the Philippines hopes to narrow the gap with its regional peers and fully capitalize on the opportunities offered by the trade pact.
“When there are opportunities for business, including small businesses, that provides jobs and income,” he said. / KOC