The Economic Effects of Free Trading Policies Within an Integrated Economy Between Philippines and the Asean-6 Member States

Abstract

The analysis of the effects that free trade has within the context of the Philippines and its fellow co-members within the Association of Southeast Asian Nations was purposed as a conduit for greater insight on trade relations between the nations of what is being considered as a fast-growing unified economy. In a more specific lens, the paper identifies how the Philippines and its fellow nations within the bloc conduct free trade while also carefully examining the number of goods that are being imported and exported. The study will use a Quantitative research design to find the changes in exports and imports as well as to point out the association between the dependent and independent variables. The study also determines the effect of trade policy. The research is a cross-country study exclusive to ASEAN-6, namely Brunei, Indonesia, Malaysia, Singapore, Thailand and the Philippines, and the period of the study is from the year 1993 – 2015. The researchers used Ordinary Least Squares and showed a high degree of predictability between the dependent and independent variables. The findings confirm that there exists a significant degree of negative correlation between the import and inflation, tariff and FDI. On the other hand, there is a significant positive correlation between the FDI and import of 4 ASEAN countries, namely Brunei, Singapore, Thailand, and Indonesia, besides a negative correlation between FDI and import of Malaysia. While the tariff and inflation of the Philippines and imports come up with a negative relationship, so this brings us to the conclusion that the independent variables are affected by the policy of free trade but for the good of the economies of the countries involved. With the result of the study, it is expected that further examination of this topic will expound more as the zeitgeist affecting the ASEAN bloc continues to tentatively change. The policy-makers should build an inclusive and sustainable trading system by identifying priorities for improvement and clarifying the design of new trade rules. The policy-makers should also come up with indicators, trade facilitation performance of different countries, information on the level of trade in services restrictiveness, and also records on export restrictions.