The urgent passage of the three landmark economic liberalization bills into law will be crucial in accelerating growth of the country’s gross domestic product (GDP) in 2022 and beyond, the National Economic and Development Authority (NEDA) said.
In his presentation during the #AskNEDA media briefing on Monday, Socioeconomic Planning Secretary Karl Kendrick Chua discussed how these reforms, namely the Amendments to the Retail Trade Liberalization Act, Foreign Investments Act, and the Public Service Act, will help attract more investments, generate employment, introduce innovation, lower prices, and improve the quality of goods and services.
“Foreign investments react favorably to a more liberalized regime. This has been the experience of Vietnam and, most recently, Indonesia. 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,” Chua said.
The NEDA chief said 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 in terms of logistics and internet performance.
“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,” Chua said.
Chua cited how Republic Act 8762, which opened up the retail sector, led to the entry of international brands like Ikea, Uniqlo, and Muji.
The enactment of the amendments to the Retail Trade Liberalization Act last December 10 will further simplify and lower barriers to entry in the retail sector and give Filipino consumers an even wider array of options.
Likewise, the urgent passage of the remaining two economic liberalization bills will attract more investments in sectors that still need significant improvement.
On Dec. 7, 2021, the Senate and House of Representatives (HOR) 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 the session this week.
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.