APEC meets on policy improvements: Reforms vital in Philippine growth

CEBU, Philippines – The Philippines’ chief economic planner said Sunday structural reform is especially vital in the country as it continue to address economic ills that impede its goal of inclusive and sustainable economic growth.

Citing studies, Economic Planning Secretary Arsenio Balisacan the country suffer from poor infrastructure, poor regulatory environment, poor governance, and peace and order problem especially in southern Philippines.

“These are the major issues that we’re so prominent in the list of investors, whether domestic and foreign, and constraints that we should pay attention to immediately, and these are the ones the present administration is paying attention to,” Balisacan told a press briefing.

He made the statement ahead of the Asia-Pacific Economic Structural Reform Ministerial Meeting (SRMM) in Cebu City that starts today and lasts until tomorrow.

Ministers and high-level officials from APEC member economies are meeting at the SRMM, led by the country’s National Economic and Development Authority.

Balisacan, NEDA director general, said structural reform means changing government policies and regulations so economic transactions can be done more efficiently.

He said it is intended to cut complex and unnecessary government regulations and processes that hinder productivity growth among citizens and businesses.

Saying that the Philippines has already started making progress,  Balisacan pointed out that the country still needs to continue the implementation of structural reforms to remain attractive to investors as a business destination.

As to structural policy barriers, he cited as example professionals seeking employment opportunities abroad who find that their licenses are not recognized in other countries; firms wanting to do business in another nation facing legal prohibitions; expiring birth certificates which require people to get a new one almost everytime; and firms having to get other licenses and permits to diversify their products.

“As a result, discouraged individuals often get stuck in low-productivity jobs, earning low incomes. Many businesses remain small and informal, while even those in the mainstream are constrained from expanding their markets,” Balisacan said.

These kinds of barriers, he said, must be removed to unleash the growth potential of the country’s citizens and firms.

In a similar press briefing yesterday, an official said that with the country beset by calamities each year, the government would be more lenient on the entry of foreign aid and professionals during disasters to improve its response.

Laura del Rosario, chairman of the Third Senior Officials’ Meeting and Related Meetings (SOM3), said APEC communities agreed during the Health Policy Dialogue Healthy Asia Pacific 2020 Amidst Disaster and Outbreaks   to continue to work on disease prevention, response and disaster preparedness.

She said that during the meeting, they worked on various ways to improve emergency responses and how to better facilitate movement of goods and equipment in times of disaster.

She said that for one, the country committed that Bureau of Customs, which normally checks foreign donations whether they are smuggled or not, would no longer impose taxes on them.

“Processing at Customs (of donated foreign goods) would take time. During the discussion, there is an agreement on facilitation that goods like the medicines should not be taxed because these go to the communities that will really benefit,” del Rosario said.

She said equipment like cranes or helicopters that will be used in disaster response, especially during earthquakes, should not also be taxed and that the country should allow foreign doctors to practice in the Philippines in times of disaster.

“Assuming there is a shortage of specialists to address the situation. We cannot be protectionist in that sense because this is an emergency situation,” del Rosario said.

“In effect, we are opening up our borders in times of disaster and this goes with our own  government response — that it should be ready to take in outside help because we all know all economies, wherever they need help, they announce that they need help,” she added.

As to structural reform, Balisacan said it can range from simple procedural changes to very significant policy reforms. While the Philippines has implemented a number of them, Balisacan said those are not part of a comprehensive package of reforms.

One reform cited is the Philippine Business Registry that cut the number of days to register an enterprise from several weeks to only 30 minutes. An example of simple reform is the removal of urine test as requirement to get a driver’s license. Another is the introduction of a universal multi-purpose ID card that allows the holder to transact business in several state agencies using only one card.   A complex reform already made is the removal of oil subsidy while allowing more players into the market and boosting the regulatory agency.

“Another is when government divested its interests in power distribution utilities and instead focused on transmission and regulation so that private sector would be encouraged to go in the power generation business,” said the NEDA official.

He likewise cited the recent passage of the competition law which would create a level playing field for businesses.

“[It] is crucial for the Philippines as a growing economy to maintain its growth momentum. It is a long process that we need to keep working on,” he said.

Del Rosario agreed, saying that for our economy to grow, we also have to promote access to opportunities, focusing on what the government can do for business, because business creates employment and it is business that sustains our economy.

“Government is facilitating business and government regulates business so that there will be no abuses in terms of labor and at the same time they pay taxes and does not create problems with the environment. We want to make things easier for them and foster innovation,” del Rosario said.

The 21 APEC economies are expected to share experiences and lessons learned in implementing their own structural reforms at the two-day SRMM, which is still the second done by APEC since 2008, when ministers agreed on a structural reform agenda.

It was in 2010 when the APEC New Strategy for Structural Reform was launched and members were to review how much progress has been made five years after.

An important objective of the SRMM meeting today is to develop the post-2015 agenda for the region to be named Renewed APEC Agenda on Structural Reform.

The APEC member economies likewise committed to make sure that they remain “healthy and strengthened” in terms of capability to stop and control the occurrence of pandemic.

“We cannot always rely on the medicines generated by developed countries. We have our traditional medicines and we encourage this because we have our forest and herbs that contained ingredients that help us address certain diseases,” del Rosario said. — / RHM (FREEMAN)