Press Release
October 10, 2019

Drilon urges passage of econ bills to make PHL more competitive

The government was told to double up its efforts to make the country more competitive amid the recent decline in the Philippines' global competitiveness ranking.

"This only shows that we have a lot of catching up to do in order to make the Philippine economy more competitive," Senate Minority Leader Franklin Drilon said as the country's global competitiveness registered an eight-point drop from 56thin 2018 to 64th this year, just ahead of Vietnam (67th) and Cambodia (106th) among its Southeast Asian neighbors.

According tothe latest Global Competitiveness Report of the World Economic Forum (WEF), the Philippine registered the biggest drop in both rank and score on the information and communication technology pillar, placing 88thplace from 67thlast year. The country's ranking also declined in the area of macro stability, from 43rdto 55thplace.

"The government must double up its efforts to make our country more competitive, and in implementing laws that promote fair competition and competitiveness," Drilon said.

"It is not acceptable that our previous competitor, Thailand, is way ahead of us at 40th place. We must improve our ranking," he added.

The other Southeast Asian countries were ranked way ahead of the Philippines with Singapore being ranked as the most competitive globally, while Malaysia was at 27thplace, Indonesia at 50thand Brunei Darussalam at 56th.

Drilon also said the situation called upon Congress to prioritize the passage into law of measures that can help open up the market to competition.

"This serves as a challenge to the 18th Congress. We should prioritize economic measures that will put the Philippines at par with other countries in terms of competitiveness, including the immediate passage of the amendments to the Public Service Act and the Retail Trade Liberalization Act," Drilon said.

"We must work on the speedy passage of these crucial measures if we are to arrest the decline in our competitiveness ranking, said Drilon.

He said that the local market remains restrictive despite efforts to gradually open up the market to competition.

"The restrictive provisions of these laws contributed in poor and inadequate services, particularly in the area of public transportation, telecommunication and Internet services, power and water supply, among others," Drilon explained.

Once we amend the present laws, we can open up some public services to competition while we provide our people with better choices, he added.

Drilon authored both measures seeking to attract foreign investment and open up the market to competition.

Senate Bill No. 13 proposes to limit the definition of public utility, while opening up other public services to the market.

Drilon explained that the proposed amendments to the Public Service Law, which was enacted in 1936, will provide a clear definition of public utilities, as he pointed out how the interchangeable use of "public utility" and "public service" has effectively barred foreign entry into the market.

Senate Bill No. 14 seeks to further relax foreign restrictions by removing investment categories and setting an across the board minimum paid up capital investment equivalent of US$200,000 in Philippine peso.

Under the current Retail Trade Liberalization Act, enterprises with a paid-up capital below US$2.5 million in peso equivalent are reserved exclusively for Filipino citizens and corporations wholly owned by Filipino citizens.

Drilon is a known advocate of economic reforms. In the 17th Congress, he authored Republic Act 11232 or the Revised Corporation Code, which introduced various reforms including the "one-person corporation", and the grant of perpetual life as the default option for corporations.

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