Cut power cost & red tape, business tells government anew

Business Mirror
WEDNESDAY, 04 JANUARY 2012 22:31 MAX V. DE LEON / REPORTER


FILIPINO businessmen expect the economy to withstand external shocks and perform better this year as long as the government adopts more flexible policies responsive to the needs of investors and help them rise through challenges.


They cited the high cost of power and red tape.


The Philippine Chamber of Commerce and Industry (PCCI), the country’s biggest business association consisting of more than 35,000 enterprises, said the government must be more supportive of business to cushion the domino effect of the European debts crisis and sluggish growth in the American economy.


“While we have developed a relatively strong domestic base for our economy to be less affected by the global financial crisis, the fact remains that we are still dependent on our trade partners to sustain our economic growth and develop our industries. The way to make us more competitive is for government to adopt flexible policies promoting long-term investments and economic stability,” Miguel Varela, newly elected PCCI president, said in a statement.


Varela said a lot of work must be done so the country can attract more investors just like Southeast Asian giants Thailand, Vietnam and Indonesia.


He said the government should do away with regulations and practices “that tend as disincentive [to] investors rather than promote industry development.”


“We need to look deeper on how we can adopt a more flexible environment for these investments to thrive. Power is a major obstacle and we need to work significantly hard in reforming our power sector and opening it up to more competition. We also need to look into how government regulations, especially the ones related to labor, environment, taxation and trade facilitation affect the flow and expansion of investments,” he said.


Varela noted that the country is doing its best to improve its competitiveness rankings, with the cost and ease of doing business—from opening an enterprise to closing one—remains significantly challenging.


Improvements, he said, are still needed in the areas of lowering the transaction costs and time involved in opening and closing a business.


“We also need to encourage greater coordination between our national government agencies and local government units to harmonize their process benefiting small and large enterprises alike. Part of PCCI’s engagement will involve greater participation by our local chamber and industry associations in the creation of one-stop as well as helpdesks and assistance centers for investors,” Varela said.


On the legislative side, Varela said the PCCI and foreign and local business chambers have been keenly awaiting the passage of several laws that are important for the private sector.


Among these are the rationalization of the fiscal incentives; anti-smuggling and customs modernization bills; amendments to the build-operate-transfer law; creation of the departments of Information Technology and Housing; competition policy and antitrust; amendments to the common carriers tax; land use and land administration reform; fiscal Responsibility; and freedom of information.


“PCCI vows to engage both the House of Representative and Senate in enacting business-friendly laws that support our common drive for economic advancement while taking advantage of the benefits of trade liberalization. These set of legislation, as we have already discussed with Congress, will serve as an important step in attraction new investments into the country,” he said.


The group, under its “PCCI Invest 2012,” aims to mainstream reform programs on significant and critical investment drivers that need public-private collaboration.


It is also pushing its “Investment Dozen Drivers” program where it seeks to help the government in attracting investments to 12 priority sectors, such as: agribusiness, business-process outsourcing, mining, tourism, home decor and lifestyle, shipbuilding, housing, construction and infrastructure, education, research and development and training, creative industries, electronics, transport equipment, and logistics.


“In these sectors, I also note our strong comparative advantage within the realm of Asean integration and inflow of foreign direct investments. PCCI Invest 2012 aims to cultivate PCCI’s rich and longstanding legacy and expertise in economic policy, trade and business services, and public-private partnership mechanisms. As an evolving theme, we will proactively seek government’s attention, proposals and input to strengthen collaboration and actively promote the readiness of the economy for more investments and trade,” Varela said.