Who's Ready for ASEAN 2015? Firm Expectations and Preparations in the Philippines

By December 31, 2015, the Association of Southeast Asian Nations (ASEAN) has committed to complete the formation of the ASEAN Economic Community (AEC), a plan that was adopted back in 2007. As countries across ASEAN seek to seize the development opportunities associated with the AEC, it is critical for policy makers to understand the perspective of firms towards economic integration and the level and nature of firm preparedness for this new political environment. This paper draws on an original survey of over 300 mostly multinational firms operating in the Philippines. Of particular note, we find widespread optimism about the effects of the AEC on firm profitability, but low levels of firm preparedness. In the last year before AEC implementation, firms’ primary policy demand on the Philippines government was more information and communication. We also develop and test theory regarding variation across firm types in their level of preparedness, their optimism regarding the effects of the AEC on profitability, and their demand for more government-to-firm communication.