NEDA cites 3 crucial economic measures
By Chino S. Leyco
The National Economic and Development Authority (NEDA) has identified three economic liberalization measures that are crucial in accelerating economic growth this year and beyond.
In a statement, Socioeconomic Planning Secretary Karl Kendrick T. Chua said the three reforms are needed to help attract more investments, generate employment, introduce innovation, lower prices, and improve the quality of goods and services.
The first measure is the passage is the newly amended Trade Liberalization Act, which President Duterte signed into law in December last year.
“The enactment of the Amendments to the Retail Trade Liberalization Act last Dec. 10 will further simplify and lower barriers to entry in the retail sector and give Filipino consumers an even wider array of options,” Chua said.
In particular, Chua cited how Republic Act No. 8762, or Retail Trade Liberalization Act of 2000, opened up the retail sector that led to the entry of international brands like Ikea, Uniqlo, and Muji.
"Foreign investments react favorably to a more liberalized regime. This has been the experience of Vietnam and, most recently, Indonesia,” Chua said in a statement.
“We are looking forward to doing the same so that we can become more competitive and provide Filipino consumers a variety of options at affordable prices," he added.
The other two economic liberalization bills that Chua said need to be passed immediately are Foreign Investments Act, and the Public Service Act.
He said the urgent passage of the remaining two economic liberalization bills will attract more investments in sectors that still need significant improvement.
The Philippines is currently the most restrictive in foreign investments in the region, and the third most restrictive in the world according to the Organization for Economic Cooperation and Development in 2020.
This has led to the country lagging behind in terms of logistics and internet performance, Chua said.
“Recently, Indonesia, Singapore, Vietnam, and Thailand have opened up their road transport, airlines, and telecommunications sectors. Technology is advancing very fast, so we need to attract more investments and innovation in these sectors so we will not be left behind,” he said.
On Dec. 7, 2021, the Senate and House of Representatives ratified the final bicameral report on the proposed Amendments to the Foreign Investments Act.
This will spur more innovation by relaxing conditions on paid up capital for firms with sufficient Filipino employment or enterprises that involve advanced technology or have a start-up status. The enrolled copy is pending transmittal to the Office of the President.
Meanwhile, the Amendments to the Public Service Act, which seeks to open key sectors such as transport and telecommunications, is currently being deliberated in the Bicameral Conference Committee.
The NEDA chief also urged Congress to approve the measure before the adjournment of session this week.
He said, all three legislations complement the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which brings the Philippines’ corporate income tax rate closer to its ASEAN peers and modernizes the country’s fiscal incentives system.