PHL a top climber in trade facilitation rankings

The Philippines was among the “lead reformers” in the Asia-Pacific region on trade facilitation, the Organization for Economic Cooperation and Development (OECD) said in a report.

Trade facilitation refers to measures that streamline and simplify technical and legal procedures for products at the border.

According to the OECD’s 2025 Trade Facilitation Indicators, the Philippines scored 14.97 across 11 indicators, putting it among the “leading reformers” like Laos, Kiribati, Cambodia, Maldives, Tonga, Vanuatu, Thailand, Indonesia, Myanmar and Vietnam.

The “lead reformers” refer to countries that had the highest percentage change between their average trade facilitation performance in 2022-2024 from 2020-2022.

The Philippines ranked 15th out of 33 Asia-Pacific countries.

“Being one of the fastest nations to adopt positive reforms on trade facilitation is a welcome sign that the country is catching up with its neighboring countries,” Oikonomia Advisory and Research, Inc. economist Reinielle Matt M. Erece said.

However, Mr. Erece emphasized that the Philippines must cut red tape and embrace digital integration to sustain its progress.

“Improvements in these areas will ensure faster trade activity while improving security and transparency on the borders,” he added.

The leading performers in the region in 2024 were Hong Kong, Japan, Singapore, South Korea, Australia; New Zealand, China, Malaysia, Thailand, and India, the OECD said.

Overall, South Korea was the best performer in the Asia-Pacific region with a 20.83 score, while the Federal States of Micronesia was last with a 3.41 score.

The OECD said nearly one in two economies in the Asia-Pacific improved their performance in areas of domestic border agency co-operation and information availability.

“The report shows that border bottlenecks and red tape, as measured by the OECD, were reduced on average by 3%-7% since 2022 across the 163 countries and regions covered,” it said.

The OECD also added that this resulted in trade facilitation reforms that reduced trade costs by up to 5% over the last decade.

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Source: Business World

How Global Trade Is Shifting as the World’s Population Ages

A demographic alarm bell is ringing in Japan, where the birthrate fell last year to its lowest point in recorded history. The sharp drop in births from the previous year marks the eighth consecutive year of decline. Former Prime Minister Fumio Kishida labeled this demographic crisis Japan’s greatest challenge. But this is more than just Japan’s story.

The world is aging, fast. As it does, global trade will shift in unexpected ways. Japan offers a preview of what much of the world will soon face, as economies everywhere start to see record-low birthrates. South Korea recently recorded the lowest birthrate globally, while Italy hasn’t seen an increase in births since 2008. And this is no longer just a challenge for wealthy, industrialized countries.

In Latin America and South Asia, the population ages 65 and older is quickly rising. Life expectancy is rising even as fewer people are being born. The result: Nearly 1 in 4 people worldwide will be 65 or older by century’s end. That shift could reshape the world in ways we’re only beginning to understand.

Countries are scrambling to adapt to the financial strain of aging populations.

Germany has raised the retirement age, a move echoed across Europe. Greece has introduced a controversial six-day workweek, while China, reversing its one-child policy, now urges families to have three children. Japan is turning to automation to fill the gaps left by retiring workers, and is bringing in more migrant workers.

Amid these shifts, Africa’s youthful population remains a demographic outlier, with over half of its population younger than 25 years old. As economies age, they may experience a decline in overall production and consumption. With fewer workers available, production is likely to move away from labor-intensive to more capital-intensive industries, making capital productivity crucial for sustaining output and growth.

The “consumption- retirement puzzle” adds uncertainty to consumption patterns. While traditional theories suggest consumption remains steady throughout life, in reality, some retirees may spend less due to insufficient savings, shifting their focus to essentials. In aging economies, consumption is moving toward goods and services that cater to an older population. Industrial equipment, transport, and work-related expenditures are giving way to increased spending on healthcare and other essentials for seniors.

In Japan, for example, demand for strollers and baby diapers has plummeted while demand for adult diapers has surged. Similar patterns are emerging globally. In China, spending on medical care and food is rising, while expenditures on transportation, household durables, and recreation are declining with age.

Simulations done by economists Sagiri Kitao and Tomoaki Yamada for Japan through 2050 suggest consumption will fall across the board as the population continues to age, with nondurable goods declining the slowest. The U.S. and Singapore are following a similar trajectory, reflecting a broader global realignment in consumption driven by demographic changes.

As populations age, changes in consumption and labor supply will reshape the structure of global trade, though the full impact isn’t yet understood and depends on the import content of consumption. Some studies hint that older economies might altogether trade less, focusing instead on more capital-intensive goods, while the aging workforce may change the skills used in producing traded commodities. Impacts on trade composition, however, remain an open question. Industrial and durable goods are among the top import and export categories globally.

We can expect these categories to shrink as work-related expenditures decline. Similarly, as birthrates fall and fewer children are born, the global market for toys, infant products, and sports equipment may contract. Such imports are already declining in countries with a higher average age, such as Japan. However, these trends are suggestive, as reduced imports could potentially be offset by increased domestic production.

Conversely, we can anticipate an increase in the trade of services, particularly in areas like healthcare and eldercare. Medical services, provided remotely or through medical tourism, will likely become a more significant component of global trade. Japan’s digital health industry is already growing fast. Its telemedicine market is expected to reach $404.5 million by 2025 (due to “shortages in medical specialists”), and broader healthcare IT, including wearable tech and online monitoring, is projected to hit $16 billion.

The changing demographics suggest a major transformation in global trade. And as the goods and services exchanged shift, there will be opportunities for countries to change their standing in global trade. For younger, less industrialized African economies, the challenge is to leverage their demographic advantage and pivot toward sectors that can thrive in a world less reliant on industrial goods.

Traditional paths to higher-income status, like export-driven industrialization, may lose their effectiveness in an aging global economy with diminishing demand for such products. Wealthier nations will need to delay retirements, rely on migrant labor, and invest in technology to sustain productivity.

Developing nations with aging populations face challenges without access to new technologies, potentially relying on older workers for longer. Addressing this demographic shift will deeply affect markets, production, and trade. It will also demand unprecedented global coordination to ensure that the world can produce and afford what it needs, with no one—and not a single country—left behind.

Source: Barrons

Protective trade policies causing high food prices – MAP

Protective trade policies such as implementing high tariffs in the agriculture sector are causing unwanted collateral damage to consumers as it results in high prices of food, a business group said, as it called for uniform tariffs across domestic industries.

In a position paper on the Tariff Commission (TC) and the National Economic and Development Authority’s comprehensive review of the most favored nation tariff structure, the Management Association of the Philippines (MAP) urged for uniform tariffs across all industries.

“High tariffs have long been shown to be counter-productive and lead to reduced investment, low or stagnant wages and higher rates of malnutrition. Using protective trade policy to help farmers causes unwanted collateral damage to the much wider mass of consumers, especially the poor who suffer the long-term consequences of high-priced food,” the group said.

Citing the Bangko Sentral ng Pilipinas, the MAP noted that on the average, food and agricultural items have accounted for 38 percent of inflation since 2017. “The recent and disheartening episodes of inflation on specific food items such as pork, fish, sugar, garlic and onions, highlight the disproportionate impact of high tariffs that underlie high domestic food prices,” the group said. The MAP stressed that Filipino families have historically been burdened with higher food prices than consumers in other countries across ASEAN and beyond.

The group highlighted that Philippine tariffs on agricultural and food commodities are higher than those applied to goods in general, citing data from the TC showing that the average tariffs applied on agricultural products is 12 percent while the average for all products is eight percent.

The MAP said that the removal of existing peaks and achieving low uniform rates in a tariff structure that provides equal incentives across domestic industries will encourage more and wider agricultural processing and value-adding, help control inflation and enhance the country’s food security.

Citing the 2018 Trade Policy Review by the Philippines and the World Trade Organization, the MAP noted that the tariff peaks translate to reduced incentive for domestic value adding.

As an example, it cited the 40 percent tariffs on corn that dampened incentives to manufacture livestock and aquaculture feeds in the country.

While it is pushing for uniform tariffs, the group also pointed out the need for effective implementation of focused adjustment and assistance measures aimed at adversely affected sectors, especially small farmers.

Overall, the MAP urged the government to move towards a tariff structure that supports food security for Filipinos, especially accessibility and affordability of competitively priced food via low tariffs on food products and strengthen sustainable agri-food value chains, especially domestic agricultural value-adding through a rational tariff structure where tariff rates on inputs do not exceed those on finished products.

Source: Philstar