Business Matters

Dear Mr. President

Exactly one year ago today, the Office of the President received a letter signed by the heads of 10 of the most influential Philippine business groups and seven foreign chambers outlining a list of key issues and proposed measures that President Aquino and his administration could focus on to drive inclusive growth through job generation, poverty reduction and global competitiveness. The list was a result of a series of dialogues convened so that the private sector could propose some substantive inputs to last year’s State of the Nation Address.

As the content remains extremely relevant today, I share below the eight action points recommended:


“As a crucial and necessary step, and given its current poor condition, strategic transportation infrastructure projects must be accelerated and implemented at the soonest time. These include projects that are in the Public-Private Partnership pipeline and other strategic transport projects. Three of these are developing the country’s main international gateway, (unclogging) the Port of Manila, and connecting NLEx and SLEx.

“Enacting an effective antitrust law and competition policy will create a level playing field that will encourage more productive investments, especially in light of impending Asean integration in 2015. There are several laws and issuances which do not address the complexities of the current market conditions, and as well result in overlapping jurisdictions and conflicts. Thus, we see the need for a single comprehensive law.


“Smuggling continues to derail your efforts on revenue collection and job generation. It is estimated that the government is losing over P100 billion annually from these illegal activities—funds which could have been used for social programs and infrastructure. It is imperative to overhaul the Bureau of Customs and to create an oversight body with private sector representation. In addition, the Philippines needs to pass the necessary law to fulfill our commitment to the International Convention on the Simplification and Harmonization of Customs Procedures, or the Revised Kyoto Convention.

“We also strongly urge the rationalization of existing incentive-giving laws to further spur investments in crucial and strategic sectors especially those that will help generate jobs and enhance global competitiveness. In this light, we recommend that the grant of incentives be subjected to periodic reviews and time-bound to determine its applicability based on current conditions. On the administrative side, we suggest that the government simplify procedures, delineate functions and responsibilities, and establish a system for coordination, reporting and monitoring for investment agencies.

“In the first quarter of 2013, the mining and quarrying subsector contracted by 17%. The Philippines remains globally competitive in terms of its geology but failed to take advantage of this due to inconsistency in policies and implementation. We support retaining the existing Philippine Mining Act, complemented by the implementation of an internationally competitive fiscal regime to provide a stable regulatory environment that will increase investor confidence. Furthermore, we encourage ensuring conformity of local ordinances to national policies, as well as respect for vested rights under existing agreements.

“Power continues to be a primary concern for investors. It is thus imperative that additional power capacity is committed within your term in all three main regions of the country, measures to bring down the cost of power are implemented swiftly, and that a favorable investment climate be provided to potential energy investors.

“We strongly urge your administration to consider amending the economic provisions in the 1987 Constitution, which restrict greater private sector participation. Pending such constitutional amendments, we suggest an initial and immediate course of action: to revise the Foreign Investment Negative List by reducing the list of industries where foreign participation is limited.

“As a final point, we encourage the executive to work closely with the judicial and legislative branches to institute reforms that would address issues of competence and efficiency in the justice system. Specifically, we support internal programs that provide training and capacity building, as well as proper compensation to public employees in the judicial system. Further, we express our concern about the seemingly arbitrary issuances and interpretations, the slow disposition of cases, and the negative impact of these to business perception.”

It will be unfair to say that nothing has happened over the last 12 months. Certainly, all proposals are now works in progress. Some require legislative action and others need the judiciary.


Our letter did suggest that the proposals could be the focus of the President for the remainder of his term. There was no illusion that these were quick fixes. There was, however, a shared sense of urgency that, under a leadership committed to transparency, accountability and good governance, today would be the best time to push forward such key recommendations that could generate the greatest impact for the country and our people.

Dear Mr. President, please do consider our letter of June 2013 again as you look back and look forward as you always do for your annual Sona. Our 8-point agenda remains as relevant as ever. Rather than count down your last days in office, maybe we could together count up the much needed reform that you made possible?

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

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