Neri proposes reforms to lower cost of doing business in RP

The high cost of doing business remains one of the prime reasons why investment inflow is slow in the country, Socioeconomic Planning Secretary Romulo L. Neri said.

To address the issue; Neri proposed microeconomic reforms to reduce the cost of doing business by 45 percent to 50 percent. Microeconomic reforms are industry-to-industry type of reforms.

However, he warned these reforms will not come easy. "I call these the hard reforms because at each stage, you have to face well-entrenched, vested interest," Neri explained.

For example, he said agriculture sector reforms should include the removal of quantitative restriction for tariffs for products such as sugar and corn.

Neri said that tariff revenues can be used to support farm productivity, making the product more responsive to changes in the market.

He likewise said the food supply chain must be improved by removing restrictive regulations, working towards more efficient shipping, building more farm-to-market roads and enhancing irrigation support.

Aside from microeconomic reforms, Neri said another way to reduce the cost of doing business is by eliminating regulatory capture.

"Regulatory capture happens when the regulators seem to be influenced by the people they are regulating and they make decisions to favor those they are regulating," Neri pointed out.

Neri cited the Civil Aeronautics Board (CAB), the Philippine Ports Authority (PPA), Maritime Industry Authority (Marina), National Telecommunications Commission (NTC) and the Energy Regulatory Commission (ERC) as agencies prone to regulatory capture.

For example, Neri said the strict airline policy restricts tourism. "We cannot bring enough tourists because airline policies tend to be restrictive," he said.

Neri proposed liberalizing airline policies by allowing more flights to come in.