Government policies still worry EU businesses

MANILA, Philippines — Challenges in the business climate continue to hound European companies in the Philippines, with some of the current administration’s policies seen as more worrying bottlenecks in the past year. 

In a recent assessment of its 2016 recommendations, the EU-Philippines Business Network (EPBN) cited little progress or no action by the government toward achieving some of the group’s recommended policy reforms in the areas of competitive business environment, trade facilitation, tourism and healthcare.

“Despite the efforts of the administration in promoting the Philippines as a safe destination, security concerns persist,” the EPBN said regarding its call to improve security at major tourism destinations in the country. 

The group said the weak enforcement of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act was also not helping the country’s business environment.  

It added that despite the positive reforms carried out by the Food and Drug Administration (FDA) and the technical assistance program from the EU in support of better regulation and anti-counterfeit enforcement, cases of unregistered and fake medicines continue to increase. 

As far as intellectual property rights (IPR) protection is concerned, the EPBN said “while IPOPhil has moved to allow recognition and registration of geographical indicators, there is still no specific legislative or executive framework to establish their protection.”

The EPBN said there has also been no progress in its recommendation to remove non-tariff barriers to trade in line with ASEAN economic integration. 

“The ATA Carnet Convention was not applied in the Tariff and Customs Code. Import restrictions and licenses under the Tariff and Customs Code of 1978 Decree 1464 said imports of corn, rice and other products are restricted. The Philippines’ WTO waiver for rice imports already expired in June 30, 2017, while fish products may be imported only when the import is certified as necessary by the Department of Agriculture in observance of its food security policy,” the EPBN said. 

Meanwhile, the group also identified “retrogressions” in some of its policy recommendations last year, particularly those in the sectors of energy and food and beverage.

“The current administration has abandoned the 30-30-30-10 energy mix policy in favor of a 70-20-10 formula,” the EPBN said, referring to its recommendation last year to enforce a sustainable energy mix policy and review existing licenses for planned coal projects. 

The group said there is also a lack of interest in the new administration to approve additional installation targets for renewable energy.

In addressing inefficiencies in the certificate of product registration process to facilitate product registration, the EPBN said its Food and Beverage Committee members have reported significant delays in the e-registration process with the FDA despite the computerization of the registration process.

For its call to reduce the excise tax on champagne and sparkling wines, the group said the opposite is happening as excise tax is increased every year. 

“The Philippines has the opportunity to attract foreign companies that are willing to invest in Southeast Asia. However, substantial reforms are needed in order to provide for the creation of a more competitive business environment that includes a level playing field and an appealing incentive scheme for foreign investors. Further reforms conducive to the ease of doing business in the country will contribute as well to create an attractive destination for foreign investment,” the EPBN said. 

The EPBN is a project co-funded by the European Union and implemented by a consortium of European business organizations based in the Philippines.