World Bank recommends: Open up shipping, rice, telecommunications sectors

MANILA, Philippines - The World Bank is urging the country to open up its telecommunications, shipping, and rice industries to more competition locally and internationally to increase competitiveness and attract more foreign investments.

Karl Kendrick Chua, senior country economist of the World Bank Philippine Office, said the three industries have the potential to create more jobs if only the country could improve the quality of their service and lower prices.

“These are the sectors wherein the costs are somehow prohibitive, negative to the quality of service you get,” Chua said.

In the telecommunications sector, Chua said the country’s Internet costs are among the highest in the region but consumers also get the lowest speed.

In shipping, it is currently way more expensive to ship between local destinations in the Philippines than if one were to ship from a foreign port, Chua noted.

“This is one reason why agriculture produce from Mindanao are having a hard time getting to the markets in Luzon or Visayas,”  he said.

The World Bank likewise believes the country’s  agricultural  sector  has  been underperforming  for  over  30  years now,  characterized  by  low  growth  and  productivity,  and high  food  prices.

Chua said calamities like typhoons have further emphasized the vulnerability of the country’s rice industry.

“We have to pay for that through the very high price of rice. This high food cost translates of course to high minimum wage, translates to high cost of manufacturing, and high cost of inputs for agribusiness or food manufacturing, therefore eroding the competitiveness of Filipinos,” he said.

For his part, National Competitiveness Council co-chairman Guillermo Luz said there are five areas -- energy and power, infrastructure, agriculture, education, and regulatory processes – that need special attention to further boost the country’s competitiveness.

“We are still stuck in a lot of red tape, we are still stuck in a bureaucratic maze as far as regulations are concerned,” Luz said.

“I think  we need to look at more opportunities to streamline e-governance, for more automation, for more business-friendly and user-friendly ways of interacting with customers, investors, and with citizens,” he added.

Luz also underscored the country’s need to revisit existing laws and regulations.

“I think we have far too many. We probably need to sit back, assess them, and do a regulatory impact assessment so we can begin to repeal some laws which are no longer necessary,” Luz said.