Business Matters

We mean business!

Last Thursday, the 3rd National Conference of Independent Business Clubs was held in Davao. Organized by the Mindanao Business Council and Makati Business Club, some 50 leaders and members of independent business clubs gathered to focus on the theme “Venturing Outward and Moving Forward: Exploring the Regional Potential.” Among those represented were the ARMM Business Council, Cebu Business Club, and Davao City Chamber of Commerce and Industry.

A key item on the agenda was the progress report on the eight recommendations made by the 2nd National Conference held last year in Cebu, which were outlined in a letter addressed to President Aquino. These are the creation of a comprehensive action plan or road map for AEC 2015; expansion of financing programs for small, micro, and medium-sized enterprises, or SMMEs; establishment of a Department of Information and Communications Technology (DICT); increase of public investments in the regions; strengthening of regional development councils; review and modification of decision-making criteria in identifying key infrastructure projects; addressing various issues affecting the tourism industry; and improving the ease of doing business in the country.


The progress report on the recommendations indeed showed the progress achieved, in varying degrees. On SMME financing, for example, we cited the Asenso program of the Department of Trade and Industry that extended P30.4 billion to SMMEs, and Landbank that led retail and wholesale lending to SMMEs with loan releases amounting to P23.3 billion. Another P7 billion in SMME financing was made possible through the Development Bank of the Philippines, Small Business Corp., National Livelihood Development Corp., Quedan and Rural Credit Guarantee Corp., Social Security System, and Philippine Export-Import Credit Agency. However, despite these loan releases, the financing gap for SMMEs remained significant.

On the establishment of a DICT, legislation to that effect failed to progress in the bicameral conference committee of the 15th Congress despite being identified as one of the programmed measures under the Philippine Development Plan, or PDP, for 2011-2016. The DICT is envisioned to become the executive branch’s primary policy, planning, coordinating, implementing, regulating, and administrative entity for the Philippine ICT sector.  It is aimed at ensuring the delivery of reliable and cost-efficient communications facilities, as well as other multimedia infrastructure and services.


A DICT is seen as a critical step in addressing our low ranking in terms of the Networked Readiness Index in the Global Information Technology Report of the World Economic Forum. We’re still ranked 86th among more than 140 economies from 2010 to 2013; in other words, we’re still in the bottom half. A number of bills are now pending at the committee level in both chambers of the 16th Congress, and legislation still has a long way to go.

To be fair, legislation is not a function of the executive branch. However, lack of support from President Aquino, based on reports that he is not keen on adding to the bureaucracy, contributes to making DICT legislation less of a priority.

On the other hand, there was significant progress in the various issues affecting the tourism industry that were raised in the letter to the President. First, the Common Carrier’s Tax was repealed. Second, the Court of Appeals ruled that the government, and not private entities, should pay the customs, immigration, and quarantine personnel’s overtime charges in order to ensure round-the-clock operations of all airports and ports. Third, the European Union ban on Philippine Airlines has been lifted (although the US Federal Aviation Administration’s Category 2 downgrade remains in effect). Finally, the Visa on Arrival Program was put in effect in all international airports, extending the initial stay of foreign tourists from 21 days to 30 days. These all augur well for our tourism targets this year.

There were two very positive developments concerning the ease of doing business in the country. First, last May 17 Administrative Order No. 38 was signed to create the Ease of Doing Business Task Force, whose main purpose is to implement and review the game plan designed by the National Competitiveness Council (NCC).  Second, in the 2014 report published by the World Bank-IFC, the Philippines made huge strides in improving regulatory processes that make it easier to do business in the country. The Philippines’ rank jumped 25 places—from 133rd last year to 108th. The NCC led by Bill Luz deserves credit for these major strides.

That there has been significant progress in some of the recommendations should convince the business community to keep engaging the government on the various issues that impact on our competitiveness as a nation.  Lack of progress in the others should push it to engage the government even more aggressively. To make the engagement meaningful, an effective monitoring and feedback mechanism must be established so that the business groups can not only track but also ensure progress in their recommendations.  This mechanism must become another showcase of the Public-Private Partnership program for a more competitive Philippines.

While we are clear that this annual conference and its recommendations are serious matters, I wonder if our partners in the public sector feel the same way.  With this year’s list of recommendations, the National Conference of Independent Business Clubs aims to work more closely with the government to show that we mean business!

Peter Angelo V. Perfecto is executive director of the Makati Business Club.


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