MANILA, Philippines - President Aquino vowed to address the various concerns of the business sector, including power supply, local government units that are not friendly to businesses, cyber crimes as well as drug manufacturing and healthcare issues.
During the Wallace Business Forum Quarterly Roundtable held in Makati City last Wednesday, the President said the government was working to make power rates cheaper and ensure that there was enough capacity for power generation for the benefit of the business sector.
“We believe that the solution is towards making electricity prices more reasonable, as we have to have the capacity to install on base load plants. So that has been the primary focus,” Aquino said.
Energy Secretary Rene Almendras said the government is encouraging base load generation expansion, believing that it is the key to reduce power rates.
Almendras said the base load plants are the cheapest source of electricity, adding that at present, the country is using non-base load plants or more expensive fuel plants to generate base load, making electricity rates more costly.
He said the government’s problem was the difficulty to find enough investors who would like to host such plants.
Almendras also announced that government would sign contracts at lower generation charge saying there is a new coal-fired plant proponent willing to come in at P4.25 per kilowatt-hour.
“So from the P5.35 to P4.25, that’s a P1.10 cut in generation charge. But we have to allow those plants to be built. We have to make sure that those plants come in because the newer plants are going to be more efficient,” he said.
He also explained that the Energy Regulatory Commission-approved generation charge for Manila Electric Co. for Luzon was P5.35 per kwh.
Almendras said some electric cooperatives failed to invest in developing or upgrading their facilities that result in power interruptions and fluctuations, noting that government has initiated a program to address the problem.
He underscored the need to reformat some of the electric cooperatives because sometimes the problem isn’t technical but political.
While reforms in the energy sector may be unpopular in many provinces, Almendras said they would continue initiating these changes to make sure that the distribution utilities, especially the electric cooperatives, step up as far as distribution quality energy was concerned.
Fight vs cyber crimes
The President also assured the banking and finance sectors that his administration supports the fight against cyber crimes that are affecting business.
“As you know we are in the midst of judicial reform. We actually have a lot of issues with the judicial system and now, we are just undertaking a major step,” the President said.
“You’ll come across a lot of data that does indicate that we are being utilized by international groups in cyber crimes. So this is an idea worth mentioning to the incoming Chief Justice who will sit in the judiciary,” the President said, adding that he was still awaiting the list from the Judicial and Bar Council (JBC) so he can pick from the list the new Chief Justice of the Supreme Court.
The banking and finance sectors raised several issues with the President that government must address to enhance the business climate and encourage investors to come to the Philippines.
Citi Country Officer for the Philippines Sanjiv Vohra mentioned three areas in which the government could act to help or improve the country’s banking and finance sectors.
These are fast-tracking the mortgage legislation, which allows investors to partake in more important sectors, revising laws and guidelines to expand the qualified investor base, which will allow the banking and finance sectors to bring back the wealth management business in the Philippines and including the gaming industry for Anti-Money Laundering Act (AMLA) coverage.
The gaming industry is an important business in the Philippines to effectively promote tourism, Vohra said, adding AMLA must be extended to cover this industry.
Vohra commended the Aquino administration for supporting amendment to the provisions of the AMLA. With regard to special courts, he noted the banking and finance sectors support the creation of these courts to fight the proliferation of cyber crimes.
“What we would like to do is for special courts to be created so that the whole process can be expedited. I believe the UN has proposed the creation of an international tribunal on cyber crimes,” he said.
Changing LGUs’ mindset
The President likewise said the administration was working to change the mindset of local government units and empower them so that they would become more business friendly.
“We are working on really upgrading also the local government units. We want a change in mentality from ‘what gets me elected’ to ‘what is good for the long-term benefits of the community’. And some of it might be counter intuitive to those who keep on remembering that they have to run again every three years,” the President said.
The President acknowledged that there were LGUs extremely unfriendly to investors, forcing companies to relocate to other areas in the Philippines.
But there are improvements, according to the President. A recent Social Weather Stations survey showed a 24-percent increase in positive perception in the issuance of local permits by city and municipal governments, he said.
Aquino said that there was 73-percent satisfaction rating in the performance of the LGUs in processing business documents, such as permits and licenses.
“So it is a work in progress. There are various programs that encourage positive behavior from the LGUs, getting the good housekeeping (seal),” he said.
Aquino likewise said there must be a corresponding drive once more power was given to LGUs. And there must be greater execution and exercise of this power towards the common good against the parochial interest of politicians.
LGUs must be empowered and encouraged for the responsible exercise of its power, the President said, even as he asked the country’s business leaders to give his administration more time to carry out more reforms.
The President expressed his gratitude to the forum organizers for giving his administration an opportunity to express its views on issues concerning the business sector and at the same time hearing the sentiments of the sector.
He also said he would look into the concerns of the pharmaceutical manufacturing and healthcare sectors in the country, particularly law-mandated price control and monopoly issues.
The President also said he would ask the Department of Health to come up with statistics about the actual number of Filipinos who never get to see a health professional. Industry experts said six out of 10 Filipinos do not get to see a health professional in their lifetime.
In an industry overview, Carlito Realuyo, the head of Sanofi-Aventis in the Philippines said Pharmaceutical Association of the Philippines (PHAP) supports a majority of the Aquino administration’s healthcare agenda, specifically Republic Act 9711 or Food and Drug Administration Act, the Mexico City Political Declaration on Universal Health Coverage, the universal health care and the Public-Private Partnership (PPP).
PHAP also supports moves increasing fees that encourage the government to fast-track the approval of Food and Drug Administration’s (FDA) revenue retention so the agency can build capacity and improve services and enforcement, Realuyo said.