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Friday, March 29, 2024

Unfair trading rules are also poll issues

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Candidates in the 2016 presidential election may find many economic and business issues abstruse for the electorate to comprehend. But economic topics, in reality, are the ones that will ultimately matter to the voters when they are translated into jobs, prices and cost of living, and financial security.

The four presidential candidates or their representatives failed to impress the business sector during the 5th Arangkada Forum held Tuesday at the Marriott Hotel in Pasay City. The Joint Foreign Chambers noted the candidates, who were given the chance to present their respective economic platforms during the event, did not address the question on how to improve Philippine economy.

The JFC, comprising of foreign business chambers in the Philippines, wants the next administration to basically keep current reforms and make them bolder and more inclusive.

“We expect to see a continuation of reforms that the previous administration had introduced and build on that,” JFC and American Chamber of Commerce of the Philippines advisor John Forbes said during the forum.

Arangkada, a government policy watch group that includes members of the Philippine Association of Multinational Companies Headquarters Inc., assesses and makes recommendations on improving the economy and business transactions.

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The forum reminded the candidates that foreign investments were a critical component of economic growth and in generating jobs and lowering the poverty level. The business grouping committed to help the new government in raising the foreign direct investment level by two to two-and-a-half times from the current level in the next 10 years.

It cited the success and the benefits of the public-private partnership program to the consumers, saying the privatization of water services effectively reduced water cost and expanded distribution channels to reach even the remote areas in Metro Manila.

“PPP brings down prices. It makes prices more stable and enable commodities to bring out the best of their qualities,” said European Chamber of Commerce of the Philippines president Guenter Taus.

The JFC stressed the importance of job creation, increasing FDI to over $10 billion yearly, doubling exports to $100 billion and hiking infrastructure spending to support trade and investment and industrial development.

Business restrictions

Such goals, however, may be difficult to attain if the succeeding government fails to level the playing field to foster competition and change the rules of doing business midstream.

Former Finance Secretary Roberto de Ocampo, for one, noted that the regulation of businesses was bordering on the excessive. Such sentiment was shared by many in the forum. 

Traders observe that instead of helping businesses flourish and building a framework where everything operates more efficiently, regulations in the country oftentimes serve to hinder growth. Building a power plant in the Philippines, for instance, requires a hundred signatures and clearances even from the barangay level.

Dan Lachica, president of Semiconductor and Electronics Industries in the Philippines Inc., earlier warned that frequent changes on rules in the country’s business environment could negatively affect the image of the country. 

Seipi said the unpredictability of investment rules could send negative signals to prospective foreign investors and impact on their decision to do business in the country.

The supposed reforms in the power sector are also creating a confusion in the industry and could raise electricity rates and render electronics exporters less competitive. Seipi cites the proposed revised rules on contestability, as well as the initial draft of the rules on the mandatory shift to competitive retail electricity market in the energy sector.

The proposed regulation could result in less retail electricity suppliers to choose from. With less suppliers in the market, buyers of electricity will have decreased bargaining power during supply contract negotiations. This, in turn, drives up the cost of power.

The draft rules actually contradict certain provisions of the Electric Power Industry Reform Act of 2001, which encourages buyers or customers to choose from any supplier of their choice, without limitations or restrictions. 

The industry also expressed concerns over whether contestable customers would be allowed to sign a contract with one prospective generation company, after their initial deal expired.

The industry, in addition, finds the time period by which they could secure a contract with a RES too tight. Seipi said manufacturers could end up incurring higher power cost if they would be automatically designated to a supplier of last resort, in the event they fail to meet the deadline. 

It called for  public consultations to arrive at a consensus and avoid a decision detrimental to the semiconductor industry. 

E-mail: rayenano@yahoo.com or business@thestandard.com.ph or extrastory2000@gmail.com

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