Phl needs to reform policies to compete in unified market

CEBU, Philippines - The Philippines may lose competitive advantage if its policies will not conform to the changing requirement in the upcoming ASEAN economic integration next year.

Economist Enrique Soriano said that even if the integration is yet to be implemented, the Philippines already felt the effects of it, while other countries have already started its works in positioning in the region in terms of visibility, presence, and attracting investors.

Soriano mentioned the transfer of big Foreign Direct Investments (FDIs) from the Philippines to other ASEAN countries like Ford, among others because of the "sweetheart" deal offered by neighboring countries, and their friendly policies on accommodating investors.

"We still have very high restriction in ownership, unless they fix these issues, the Philippines may lose its competitive edge," he said adding that when the ASEAN will open, investors will have wider options within the region.

He mentioned that aside from the restrictive policies in ownership, wherein foreign companies can only own minority stake of the company, unless it is located in an economic processing zone, could be a threatening factor that the Philippines may suffer once the ASEAN Economic Community (AEC) will be opened.

Besides, he said despite the effort of the government to project and curb corruption, still cost of starting a business or doing a business in the Philippines is still expensive.

Soriano, who is an advisor of the Wong and Bernstern Advisory Group for Asia and Western Europe emphasized that even to get permit from the barangay level "you have to worship the barangay captain."

Moreover, Soriano said in terms of infrastructure, the Philippines is lagging behind other ASEAN countries, and this is another critical factor that would threaten the competitiveness of the country when the integration will come to its full-blown implementation.

"We are not ready to compete with the ASEAN nations in terms of infrastructure. We have poor logistical infra, our airport and seaports are not competitive," he added.

"Looking at the ASEAN integration issue, I am a bit wary. In the infrastructure alone-we are not ready," he reiterated.

Noticeably, he said while the integration comes near, the Philippines is already flooded with cheap consumer products coming from different countries in the region, such as the availability of different brands in cooking oil, which are mostly priced cheaper than Philippine-made brands.

According to Soriano, the entry of these consumer brands is just a prelude of what's going to come in the next few years, once the free entry of goods, workers within the region will start.

Local manufacturers in the Philippines, he said should take a serious look on this in order not to be "caught off-guard", when low priced consumer products, including basic necessities like coffee, cooking oil, among others will enter the Philippine consumer market and because of their competitive and even lower prices local manufacturing is threaten.

Cebu Chamber of Commerce and Industry (CCCI) president Lito Maderazo  said that business sector still has to understand the effects of the integration, although there are opportunities coming up, the sector should also be warned by its downside so that they will be prepared for the new set up in the economic flow. (FREEMAN)