Speaker calls for support to boost Phl competitiveness

MANILA, Philippines - Speaker Feliciano Belmonte Jr. has called for support on efforts both in the public and private sectors to improve the country’s competitiveness as key to continued growth.

Speaking at the recent 39th Philippine Business Conference, Belmonte said the public and private sectors should work together in establishing the right set of policies and laws that will impact upon key socio-economic areas as the country faces many challenges in the economic integration of the Association of Southeast Asian Nations (ASEAN) in 2015.

“Greater competitiveness will allow us to attract the much needed investments that will create many jobs and opportunities for our people,” Belmonte said.

“Let us not be complacent but move ever forward with the necessary structural reforms. In the face of increasing globalization, in the wake of ever-increasing competition, let us continue to make ourselves more ready and able to face the challenges ahead, particularly the ASEAN economic integration targeted for 2015,” he said.

He said the ASEAN goal to establish itself as a single market and production base with free movement of goods, services, labor and capital by 2015, “will be an occasion for fresh opportunities as well as challenges.”

While economic integration does not ensure equitable distribution of benefits, markets work to benefit constituents more within a competitive economy, he said.

He likewise focused on reforms, saying the continuing fight against corruption is but one of many challenges that bear direct relevance to the country’s growth and competitiveness.

“It thus becomes imperative for policy making bodies and the legal systems of ASEAN countries to acquire the capability to promote economic activities while enforcing the proper implementation of competition policies and laws,” Belmonte said.

Institutional and structural reforms, he said, are critical to the success of liberalization and in ensuring that ASEAN market is kept open to new entrants, noting that the country’s existing laws do not sufficiently equip the nation to hurdle problems that may arise in 2015 should the ASEAN constitute itself into a single market.

Promoting a more conducive environment for business is necessary to help our local industries and to encourage the inflow of foreign direct investments, he said.

He said in Europe, government policies designed to favor competition have produced many benefits. Removing trade barriers increased income by 1.1 to 1.5 percent over the period of 1987 to 1993, generated 30,000 to 90,000 jobs, and decreased inflation by one to 1.5 percent.

While the country’s competitiveness rankings and general business sentiments towards the Philippine economy have improved, Belmonte said “we still need to ensure that the Philippines becomes a preferred investment destination.”

On the need to have a well-defined national policy on competition, the Speaker urged the passage of his proposed Philippine Fair Competition Act of 2013 contained in House Bill 1133, which aims to minimize, if not totally eradicate, unfair competition, monopolies, and cartels.

“To enable our country to attract more foreign direct investments, I continue to make representations to discuss possible amendments to the restrictive economic provisions of the Constitution.  I firmly believe that relaxing the provisions on ownership of land, utilities, educational institutions, and mass media will bring in investments that will create much-needed jobs,” he said.

Parallel to the proposed changes to the restrictive economic provisions in the Constitution, Belmonte said he will push for the revision of the Foreign Investment Negative List to reduce the number of industries where foreign participation is limited.

The House leader also proposed amendments to the following: 1) Foreign Investment Act, by lowering the minimum paid-in capital for foreign equity, reducing foreign investment employment requirement, and removing divestiture requirements for foreign investors; 2) The Condominium Law, by allowing foreign ownership of the capital stock of horizontal condominiums, industrial and tourism estates, and retirement villages;

3) The Public Service Act, by defining “public utility” and distinguishing between “ownership” and “operation”; and 4) The Retail Trade Act, by reducing the threshold for foreign investment in the retail sector to the level stipulated in the Foreign Investment Act.

On the matter of infrastructure, Belmonte said having well-developed infrastructure reduces the effect of distance between regions, making it possible for the Philippine market to be integrated, at a low cost, to markets in other countries and regions.

He also stressed the importance of amending the Charters of the Philippine Ports Authority and the Maritime Industry Authority in the development and operations of the port sector.

Likewise, he noted that the proposed Coastwise Trade Bill (HB 1789) intends to promote competition in the shipping industry by allowing foreign vessels to transport passengers and cargoes between ports within the country’s waters.

There is also the move to liberalize the country’s Cabotage law as key to lowering the transport cost of agricultural and industrial products, spurring tourism, and increasing port revenues through the entry of foreign vessel operators.