ASEAN member countries are moving towards achieving the ASEAN Economic Community (AEC) by 2015. Recent studies have shown the benefits of the AEC. For example, the study edited by Plummer and Chia (2009) presents estimates that ASEAN economic welfare will rise by 5.3 per cent or US$69 billion relative to the baseline. It is therefore important for policymakers in the region to sustain the momentum — or perhaps even accelerate the pace — towards establishing the AEC.

Policy measures are being implemented based on the AEC Blueprint agreed on in 2007. However, progress among the ASEAN member countries in meeting their commitments has been uneven. Moreover, many difficult regional issues have not yet been resolved. Among these are wide development gaps and entrenched domestic interests. Hence, achieving the AEC in 2015 may be on the optimistic side. The theme of 2010's ASEAN Summit, “From Vision to Action”, is therefore quite appropriate.

This chapter reviews the progress of the Philippines in meeting its commitments. The progress is largely reflected in the AEC Scorecard, an analytical tool in tracking the achievements of member countries that was developed by ASEAN for this purpose. The framework of the AEC Blueprint is described in Box 1 of the Preface. As of this writing, only the Philippine scorecard for the first batch of priority actions was available. The official data is supplemented by a study conducted by the Economic Research Institute for ASEAN and East Asia (ERIA; Corbett and Umezaki 2009).

In the next section, the current Philippine economic situation is described by comparing it with other economies in terms of indicators of competitiveness. Many of the latter are components of the AEC Blueprint. This is followed by a section where the Philippine performance in terms of the ASEAN Scorecard is presented and discussed. As mentioned earlier, the official data will be supplemented by results from the ERIA studies. The penultimate section attempts to explain the progress of the Philippines in meeting its AEC commitments, particularly vis-à-vis the more developed ASEAN countries. The last section looks at structural problems in the Philippines that may prevent it from benefiting from the AEC. These problems also explain the relatively poor performance of the Philippines in terms of competitiveness.