The Economic Research Institute for ASEAN and East Asia (ERIA) is calling on the region to complete its electronic customs rollout, unify its patchwork of trade rules, and fix infrastructure bottlenecks blocking mineral processing in resource-rich countries, including the Philippines.
The recommendations come from a July 2026 report https://www.eria.org/uploads/Private-Sector-Insights-on-Navigating-US-Trade-Policy.pdf/ synthesizing two business dialogues held last year in Jakarta and Kuala Lumpur, where firms described how they are restructuring supply chains around US tariffs.
The ERIA paper examines how the United States’ imposition of a 17 percent reciprocal rate on select trade partners will affect businesses in the region. This rate is among the lowest in ASEAN, following negotiations between the Philippines and five other member states that secured zero tariffs on select products in exchange for a flat rate of 19 to 20 percent on the remaining goods. Countries that did not participate in the negotiations, such as Lao PDR and Myanmar, still face a 40 percent tariff. The shift has pushed ASEAN businesses to look at how goods actually move across the region, and the report finds the Philippines behind on several fronts.
ERIA highlights Indonesia’s system as a model that other countries have not yet matched. In Indonesia, a single AI-validated digital submission lets goods clear at the gate with no stamps or manual checks. As a result, administrative costs fell from millions of rupiah to nearly zero, and clearance times shrank from several days to under an hour.
The regional platform driving this transformation is the ASEAN Single Window, which is being developed through a three-phase plan. This plan starts with a feasibility study, then establishes a legal framework, and ultimately aims to enable a complete exchange of electronic documents with external trading partners, including the United States. The Philippines is a member of the Single Window system.
A second recommendation targets the paperwork exporters used to claim tariff preferences. Current ASEAN trade agreements, including the Regional Comprehensive Economic Partnership and the ASEAN-China Free Trade Agreement, require 40 percent of a product’s value to originate in the region, a threshold the report says many firms cannot meet. A separate study cited in the paper found that the ASEAN Trade in Goods Agreement’s rules of origin add an average cost of 3.4 percent on an ad valorem basis, with higher costs in textiles and automotive. ASEAN has introduced electronic certificates of origin, known as e-Form D, and a self-certification scheme called AWSC, but the report says uptake remains limited because of inconsistent documentation requirements and differing interpretations among customs officers from one country to the next. ERIA recommends a single ASEAN-wide framework to replace the current patchwork, which it says would lower compliance costs for exporters, including Philippine firms.
The third recommendation focuses on critical minerals. The Philippines has deposits of nickel, copper, cobalt, and silver; however, the report notes that development has been limited by high energy costs and community opposition to mining projects, rather than by a shortage of these resources. In contrast, Indonesia holds 25 percent of the world’s nickel reserves and has made more progress in downstream processing. The discussions reveal that ASEAN’s midstream and downstream mineral processing capabilities still rely heavily on China, despite projections indicating a sixfold increase in global demand for these materials by 2040, driven by electric vehicles, batteries, and semiconductors. ERIA’s recommendation urges coordinated regional processing capacity and the resolution of energy and infrastructure challenges that currently hinder production in resource-rich member states.
The report’s case study on regional cost efficiency, known as clustering, highlights a significant gap in operational costs. Many companies are relocating semiconductor packaging and testing to reduce expenses, with Vietnam and Malaysia identified as the key hubs benefiting from this trend. For instance, a chip shipped from Vietnam to China for packaging and then back costs between $0.80 and $1.20 per kilogram by sea, a process that takes three to four weeks. Clustering and transporting the same chip via a four-hour truck route to Malaysia reduces the shipping cost to between $0.10 and $0.20 per kilogram. Jakarta-based attributes this shift to a 30% to 40% reduction in regional logistics costs and a halving of time-to-market. The report does not reference the Philippines among the clustering hubs.
ERIA provides research and policy advice to leaders during the ASEAN Summit and East Asia Summit.
