OCT.

22, 2013

NR # 3264C

Belmonte encourages global competitiveness and integration towards sustainable economic development
Speaker Feliciano Belmonte, Jr. said that global competitiveness should be supported as the key to continued growth. He made this statement before the 39 th Philippine Business Conference, Tuesday, at the historic Manila Hotel. Greater competitiveness will allow us to attract the much needed investments that will create many jobs and opportunities for our people, Belmonte said before a full-house assembly of the countrys business leaders. This is why, he 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. 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, the House leader stressed. As the House leader elaborated on the ASEAN goal to establish itself as a single market and production base with free movement of goods, services, labor and capital by 2015, he likewise said that this will be an occasion for fresh opportunities as well as challenges. He said that while economic integration does not ensure equitable distribution of benefits, markets work to benefit constituents more within a competitive economy. Belmonte then cited the Filipinos resiliency and creativity as well as the current positive state of the economy which show our preparedness for integration. Filipinos have proven that we can stand with the best of the best in the world armed with creativity and ingenuity, he said. Belmonte likewise focused on reforms, saying the continuing fight against corruption is but one of many challenges that bear direct relevance to the countrys growth and competitiveness. The Speaker also voiced his special concern relative to the victims and destructions wrought by the devastating earthquake that hit Bohol province and central Visayas. Expect Congress to coordinate with the Executive to address the immediate rehabilitation of areas affected by the recent earthquake, the Zamboanga crisis, and the destructive typhoons in Central and Northern Luzon, he assured. On the challenge of regional integration, Belmonte said today, ASEAN embarks on a long process of integration for the purpose of strengthening the regions economic self-reliance

while committing itself to an open market orientation. 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, he said. Institutional and structural reforms, he added, are critical to the success of liberalization and in ensuring that ASEAN market is kept open to new entrants, noting that the countrys 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. Our industries will need to be more efficient to be able to compete with their ASEAN counterpart, Belmonte stressed. Let me note that in Europe, government policies designed to favour competition have produced many benefits. The policy to remove barriers to trade 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 1 to 1.5 percent. A good proportion of these gains are attributed to improved efficiency and competitiveness, he narrated. While the countrys competitiveness rankings and general business sentiments towards the Philippine economy have improved, Belmonte stressed that 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. HB 1133, now pending at the House Committee on Trade and Industry chaired by Rep. Mark Villar of Las Pias City, also proposes to create the Philippine Fair Trade Commission that will prosecute those engaged in unfair and deceptive trade practices and other such practices with the purpose of preventing, restricting, or distorting competition. 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 pointed out. 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 that 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. The Speaker 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 countrys waters. There is also the move to liberalize the countrys 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. We shall also conduct a review of the implementation of the Electric Power Industry Reform Act (EPIRA) and if necessary, pursue remedial measures through amendments, Belmonte said, adding that proposed amendments to the Build-Operate-Transfer Law, Strengthening the Regulation of the Water Sector, the National Transport Policy, Indigenous Energy Sources Promotion, and the Open-Skies Policy are now in the legislative mill, he revealed. To curb smuggling and facilitate trade, he said Congress will pursue the proposed modernization of the Bureau of Customs and strengthen the Anti-Smuggling provisions in the Tariff Code. Another vital move to sustain the health of the macroeconomy is the amendments to the Bangko Sentral ng Pilipinas which would strengthen its regulatory and supervisory powers as the guardian of the monetary, credit, and banking system of the country. We will also work vigourously towards the timely passage of the 2014 General Appropriations Act and the Corporate Accountability Act to provide rules that will make corporations more accountable to investors, he said. And to make these legislative reforms possible, the Speaker stressed the need for closer coordination with the Senate and advocate for frequent convening of the Legislative Executive Development Advisory Council (LEDAC) so that there is harmony in the reform priorities with those of the Executive. (30) dpt