We need to know why
Why does the Philippines need to approve the quality, efficacy, safety etc. of a product, whether it be a food item, a drug, a device, etc. if a competent, recognized authority in the exporting country has already done so? The government should just inspect and evaluate other testing authorities, and accredit them. Any product passed by that accredited agency should be accepted. Just think of the red tape saved, if nothing else.
The point came up in a comment from a friend about my column on balikbayan boxes (“Take time to ponder,” 9/24/15) where he—correctly, I believe—said that much of the smuggling of commercial items in these boxes is done to avoid, not duties and taxes, but the interminable delay, complexity and frustration of getting approval to trade in the formal sector. So going informal is a very understandable solution. For five years this administration has been talking of simplifying the bureaucracy—and there has been very minimal improvement. I suggest we focus on getting the next one to act in a revolutionary way. Minimize government intervention, intrude only when absolutely necessary.
But where the government can act, but hasn’t, is on some very essential reform bills. When I say “government,” I really mean “leader.” Philippine culture is such that there’s a strong reverence for and deference to the boss. Which is nice—up to a point. The Philippines exceeds that point. There’s somehow the belief that now that he or she is the boss, he or she knows it all. A president comes to power with only a limited background, yet is now deferred to on major decisions. Worse, no one will disagree or argue with him or her. The worst aspect is that he or she doesn’t even have to explain his or her decisions.
There are about a dozen major bills in Congress that are critical to improving the business environment and that will unquestionably accelerate economic growth and create ever-so-needed jobs. Experts have recommended them, the wider business community has supported them, yet President Aquino declines to give them the priority needed for Congress, principally the House of Representatives, to push them through.
Among these measures is the bill proposing to lift the restrictive economic provisions in the Constitution. Business groups have been clamoring for the measure’s passage as they realize how essential it is, and Congress agrees. This is one bill that can help Mr. Aquino and succeeding presidents to attract more job- and livelihood-generating foreign investments. Mr. Aquino was even quoted as saying at a meeting with students in Davao City that foreign investments create jobs and encourage local businesses to raise the quality of their products to meet international standards. So why on earth is he opposed to opening up the economy to more foreign investments through an amendment of the economic provisions in the Constitution? It makes no sense, and worse, he has given no reason for his opposition. I believe that as a leader in a democratic society, he is obliged or even mandated to tell us why.
There’s a bill creating a Department of Information and Communications Technology (DICT). It has been passed on third and final reading in the Senate but the House version is still pending on first reading. Yet this is the most important change needed for the country’s future success. We need a department that will monitor, promote and support the most dynamic sector of the economy today—the information and communications technology-business process outsourcing sector. The proposed DICT will also integrate government processes and support the government’s anticorruption agenda.
A bill that will amend the Build-Operate-Transfer Law is crucial in building much-needed infrastructure. In global competitiveness surveys, the Philippines fares disappointingly in building infrastructure. This has primarily been attributed to paltry infrastructure spending every year. The proposed law exempts public-private partnership (PPP) projects from the “vagaries” of local ordinances, like local taxation and complicated business registration processes. It adds new PPP variants such as joint ventures, concessions, and management contracts. The measure is pending in both chambers of Congress and isn’t likely to be enacted before June 2016 without the President’s support.
Other key reform bills include the modernization of the Bureau of Customs which will strengthen antismuggling efforts; amendments to an antiquated (1974) labor law; and, although not directly related to business, the freedom of information (FOI) bill which he promised to enact should he become president during his campaign five years ago, and for which a very wide sector of society is pushing. He hasn’t given the FOI bill the same push that he gave the Sin Tax Reform and Reproductive Health Laws, which he certified as “urgent.” The bill has been approved on third and final reading in the Senate but is still pending at the administration-dominated House. In fact it has been languishing in Congress for more than 20 years now. That is not a sign of a healthy democracy.
Then there is the call to reduce income taxes for the less fortunate. And to bring the corporate rate more in line with the country’s regional competitors. As usual, the Philippines got the lowest level of foreign direct investments among the major Asian economies in the first half of 2015. It’s been the lowest every year of Mr. Aquino’s term, so the message has always been there: Make the country more open and cost-competitive.
These bills, if passed, will help do that. So why is he opposed to them?
He claims we are his bosses. Well, his bosses have spoken. They want these reforms. The poor without jobs need these reforms. Surely he owes us an explanation for his reluctance.
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E-mail: email@example.com. Read my previous columns: www.wallacebusinessforum.com.
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