JPEPA's potential economic value: P221B, P168B or P6B?
Which is it? Loren asks

The Department of Trade and Industry (DTI) is counting on the Japan-Philippines Economic Partnership Agreement (JPEPA) to kick in an increase of up to P221 billion in the total value of goods and services produced by the economy, or the Gross Domestic Product (GDP).

The National Economic Development Authority (NEDA), on the other hand, pegs the estimated economic gain at P168 billion -- 24 percent or P53 billion less than the DTI's appraisal.

The large discrepancy in the projected economic gains from the JPEPA has baffled Sen. Loren Legarda, Senate economic affairs committee chair.

"Which is it? Why the huge disparity in the estimates? Is this a case of two separate agencies using different metrics? Or are the two agencies simply making wild 'guestimates'? Why do their forecasts appear too rosy when compared to other projections?" Legarda asked.

The senator cited a report by the Philippine Institute for Development Studies (PIDS) showing that the JPEPA would result in a minimal albeit still positive P6.04-billion increase in GDP.

"The NEDA and DTI should reconcile their figures and be able to clearly present a more acceptable estimate. They should be able to demonstrate realistic and sensible assumptions. We have to examine closely their premises," Legarda stressed.

"For instance, they must be able to assert that our farmers will be able to export to Japan a likely extra $100-million worth of bananas, pineapples, papayas and mangoes annually, that we could not sell there sans the accord," Legarda said.

She added: "To illustrate, if we assume we will be able to sell an additional $100-million worth of fresh tropical fruits, we not only assume we have the best market share for these products in Japan now, we also assume our planters are in a position to quickly step up production to be able to capture the bigger market right away."

At present, the Philippines is Japan's major source of tropical fruits, supplying the market 79 percent of its bananas, 98 percent of its pineapples, 61 percent of its mangoes and 48 percent of its papayas, according to the PIDS.

The NEDA sees the JPEPA boosting GDP by 2.0 to 2.5 percent. This translates into an increase of P134 billion to P168 billion, based on this year's projected GDP of P6.712 trillion. The DTI expects the deal to add 1.75 to 3.03 percent to GDP, or an increment of P116 billion to P221 billion.

However, the PIDS, a non-stock, nonprofit government research institution engaged in long-term, policy-oriented research, predicts that the accord would contribute less than one-tenth of one percent (00.09 percent) to GDP, or P6.04 billion.