Relax foreign ownership limits – PCCI

MANILA, Philippines - The government will have to take decisive action on improving infrastructure, relaxing foreign ownership limits and addressing the high power costs next year to allow the country to benefit from the Association of Southeast Asian Nations’ (ASEAN) integrated market, the country’s largest business group said.

In a statement, Philippine Chamber of Commerce and Industry (PCCI) president Miguel Varela said taking decisive actions to lift the constraints to growth will enable the country to build its competitive advantage for the ASEAN’s economic integration.

“Next year is a critical year to take decisive action if companies are to satisfy a market of five billion strong consumers with products and services,” Varela said.

“We could lose out to our competitors if we delay in removing the constraints that have been making us just play catch up,” he added.

The ASEAN Economic Community (AEC) to be established in 2015 will transform Southeast Asia into a region with free flow of goods, services, investment, skilled labor as well as capital.

Varela said the private sector can build its competitive advantage and maximize the benefits of the integrated region if the government will ensure the adequacy and cost-competitiveness of fuel and electricity to power the growth of businesses and industries.

He said the rehabilitation as well as modernization of airports and seaports will be needed to accommodate the growing number of tourists and rising volume of traded goods domestically and internationally.

Varela said government will need to construct roads, rails and bridges with a priority given to linking airports and seaports to cities, key destinations and farm-to-market roads.

According to Varela, 2014 will also be critical for government to consider easing up on the foreign investment negative list including such sectors as public utilities and liberalizing the restrictive economic provisions of the Philippine Constitution.

“Foreign companies have already strategically located themselves within ASEAN for some years now,” he said adding that these firms would no longer need to set-up facilities in the Philippines to enter the market when the AEC is in place.

Other measures being pushed by the PCCI are streamlining business permits and licenses, improving customs administration and procedures, as well as upgrading the quality of education by enhancing the current curriculum based on market analysis and emerging trends.

“Certainly, the rosy picture painted by our economic managers could result to the transformation of the Philippine economy into a powerhouse economy if the government, with the support and partnership of the private sector, is able to address the constraints to growth,” he said.

Earlier, he said the PCCI expects the economy to grow by 6 to 6.5 percent this year, lower than the 6.6 percent gross domestic product growth posted in 2012 due to the damage to infrastructure and livelihood left by by the 7.2-magnitude earthquake which hit Bohol and Cebu and Super Typhoon Yolanda in Eastern Visayas.

As of end-September, the economy expanded by 7.4 percent, higher than the 6.7 percent growth recorded in the same period last year.