Speech of Senator Aquilino "Koko" Pimentel III
The 4th Chamber Connects
Conrad Manila
November 16, 2018

Undersecretary Rowel Barba, my classmate, the Undersecretaries and Assistant Secretaries here present, the private sector and business leaders here present, my fellow workers in government, and my fellow Filipinos, a pleasant Good Morning to all of you!

I am happy to be with you today and give this address on the occasion of the 4th Chamber Connects: Ease of Doing Business - Its Impact to Local Government Units (LGU) and Local Business Constituency.

I was invited to talk on the topic of Proactive Policies and Legislation in Promoting and Advancing the Economic and Business Development of the Country.

The administration of President Rodrigo Duterte has formulated a long term vision of the Philippines where every Filipino enjoys a matatag, maginhawa, at panatag na buhay. The foundation of this vision is based on three (3) "pillars" - which the government calls Malasakit, Pagbabago, and Patuloy na Pag-unlad as described in the Philippine Development Plan (PDP) for 2017-2022.

Malasakit entails enhancing the social fabric of our country. Government aims to reduce corruption, achieve efficient government service delivery, enhance administrative governance, strengthen the civil service, and reform the justice system to ensure fair and swift administration of justice. In so doing, public perception of the Philippine government will continuously improve and our people will be proud of being Filipino and that they fully trust their government.

In the Senate, we support the vision of President Duterte and are partners of the executive in the construction of the pillars forming the foundation of this vision.

To reduce corruption and achieve efficient government service delivery, we have recently passed RA 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018. This law is touted as a game-changer in battling the problem of red-tape and corruption in the delivery of government service.

The term red tape is generally believed to have originated from the practice of Charles V, in the early 16th century, of using red tape to bind the most important documents, and separate them from ordinary documents which were bound with ordinary string. The term has now deteriorated to refer to a system of regulations and official actions which restrict or deny access to swift and quality government services, usually to encourage corruption or the giving of padulas.

According to data from the World Bank, in 2017 the Philippines was ranked 113th among 190 economies in the ease of doing business, down from 99th in 2016[1].

The ease of doing business indicators are the following:

• starting a business (the Philippines ranked 173rd)

• construction permits (101st)

• getting electricity (31st)

• registering property (114th)

• getting credit (142nd)

•  protecting minority investors (146th)

•  paying taxes (105th)

•  trading across borders (99th)

•  enforcing contracts (149th), and

•  resolving insolvency (59th)[2]

The new law doesn't address all the indicators for ease of doing business but it addresses a lot of them. This fact opens our eyes that the work of easing the doing of business in our country does not stop; we still have a lot of work to do!

With this new law, the entire government bureaucratic processes shall be streamlined. No more red tape and no more corruption!

Businesses can expect streamlined processes, reduced processing times from all government agencies, including government-owned and controlled corporations (GOCCs). This is a landmark legislation that will have a direct impact on all citizens and the business sector.

Once we create an improved ease of doing business climate in the country, we can expect the influx of foreign direct investment in addition to the expected surge in Filipino entrepreneurial spirit, and this explosion of economic activities will definitely generate more employment opportunities for all Filipinos.

Aside from this, there are other Bills pending in the Senate which support Malasakit. We have SBN 1035 which seeks to create a National Commission Against Corruption in order to focus all government efforts to eradicate corruption. There is also SBN 641 which seeks to reform the Civil Service and several Bills seeking to right-size the National Government to improve public service delivery. On the matter of reforming the justice system, we have pending in the Senate SBN 509 and SBN 754 seeking to create a body to handle claims for unjust imprisonment. There is also SBN 1691 seeking to reorganize the judiciary.

But I still believe that the best and most comprehensive proposal to promote efficiency in governance is Federalism itself. Through Federalism, there shall be devolution of powers, sharing of resources, and division of labor between national government and local governments.

The second pillar which is the foundation of President Duterte's long term vision is Pagbabago. This pillar seeks to make it easier for the marginalized subsectors and people groups to participate in economic progress.

As the Chairman of the Committee on Trade, Commerce and Entrepreneurship, I am committed to shepherd Bills which give marginalized groups greater opportunities to share in economic progress. One of these groups are the MSMES or the Micro, Small and Medium Enterprises. Statistics from the DTI show that micro, small and medium enterprises (MSMEs) account for 99.57% (911,768) of the total establishments. Of these, 89.63% (820,795) are microenterprises, 9.50% (86,955) are small enterprises, and 0.44% (4,018) are medium enterprises. Clearly, therefore, an overwhelming portion of our business are micro enterprises. They are also the most vulnerable to the challenges facing businesses in the Philippines.

I am also a supporter of inclusive business. Inclusive business is a private sector approach to providing goods, services, and livelihood on a commercially viable basis to people at the base of the income pyramid by making them part of the value chain of business as suppliers, distributors, retailers, or customers.

My Committee is now conducting public hearings on several Bills and Resolutions, like SBNs 720 and 820, and SRNs 21 and 24, all seeking to promote, support, strengthen, and encourage the growth and development of micro, small and medium enterprises.

It is generally believed that in order that we may advance economic and business development in the country, we need to protect the concept of competition in business, to accelerate structural reforms to enhance competition in sectors with high impact on jobs.

In the 17th Congress, SBN 2282 entitled "An Act Promoting Fair Competition To Protect Consumer Welfare, Advance Domestic and International Trade and Sustained Economic Development by, Among Others, Regulating Monopolies, Anti-Competitive Agreements, Abuse of Dominant Position, and Anti-Competitive Mergers, Establishing the Fair Competition Commission and Appropriating Funds Therefor, and Other Purposes" was filed.

The Bill was passed and has become law - Republic Act No. 10667, otherwise known as the Philippine Competition Act (PCA). It took effect on August 5, 2015 and its implementing rules and regulations (IRR) became effective on 18 June 2016.

The PCA is said to be also a game-changing piece of legislation which will improve consumer protection and help accelerate investment and job creation in the country. The law is consistent with the government's goal of creating more inclusive economic growth. Open and free markets which are devoid of anti-competitive business practices are required so that businesses will thrive and grow.

The rationale of the competition law is to promote efficiency on the part of business entities. The only way of competing with others fairly (and legally) is to ensure that one is more efficient than one's competitors. Efficiency is a result of good practices in managing resources which then result in the "right" prices of goods and services. The rivalry among businesses, therefore, will ensure that they try to outdo each other in terms of price in relation to the quality of their product. Firms would need to produce the best quality of products at the least cost, and sell at the price dictated by the market. Otherwise, they would lose their market share to their competitors. This will, of course, ultimately benefit the consumer.

Hence, we should encourage an environment where businesses compete based on the quality of the products or services they provide and not on unfair or non-competitive practices. This will theoretically drive market prices lower and provide a plethora of quality choices for the consumers.

In a nutshell, the PCA seeks to regulate and or prevent anti-competitive agreements, abuse of dominant positions, and anti-competitive mergers and acquisitions.

The Philippine Competition Commission (PCC) was created by law to enforce and implement the PCA and it has original and primary jurisdiction even with respect to entities that are under the regulatory jurisdiction of specialized government agencies.

Just as we are pursuing measures to ensure that businesses compete primarily on the basis of the quality of the goods or services they provide, we should also make sure that the consumer is protected.

In my Committee, I am also currently conducting public hearings on several Bills which seek to strengthen our laws on consumer protection. These are Senate Bills Nos. 838, 1241, 1489 and 1518. They all seek to amend portions of the Consumer Act of the Philippines.

I am also currently in the process of hearing several bills on regulation of specific industries such as the Bamboo Industry Act seeking to promote the Philippine Bamboo Industry, the E-Commerce Roadmap Act, the Philippine Motor Vehicle Manufacturing Industry Competitiveness Act and the LPG Regulation Act to name a few.

There have also been several public hearings conducted by my committee on the Senate Resolution seeking an investigation into the alleged proliferation of substandard and uncertified steel bars.

The third pillar of the President's Philippine Development Plan is Patuloy na Pag-unlad. Under this pillar, the government seeks to lay down the foundation of an economic growth that can be further accelerated and sustained beyond the term of the Duterte administration.

One of the ways the government hopes to achieve this is by maximizing and adopting science, technology and innovation. I often say that I regard myself as a scientist and mathematician, more than a lawyer. Hence, I fully support the development of science, technology, and innovation.

In the upcoming campaign this 2019, I will be espousing the promotion of a "science culture" here in the Philippines, although I know that this topic is not a sexy topic for a campaign. Win or lose, I will follow what I believe, in my heart, is the right thing to do.

For the long term survival of the Philippine Nation, we have to develop a science culture.

Our bills and laws are well-written and well-intentioned. But the real test, as always, is in their implementation.

As legislators with over-sight functions, we work closely with agencies tasked to implement the law to ensure that all the objectives of the law are pursued so that the business sector and the public feel the full benefits of the law. They are, after all, the intended beneficiaries of all these trade-related laws.

I cannot over-emphasize, however, that the burden of promoting and advancing economic and business development in the country does not rest on the shoulders of government alone. As in all endeavors, we need the cooperation of the private sector to make these new laws succeed.

We are often regaled with stories of how it is easier to just bribe somebody in order to evade enforcement of the law. As much as we in government are making efforts to eradicate this nefarious practice, so too should the private sector refrain from offering bribes to our government officers. We should respect one another enough to be professional in all our dealings.

Some say that economic and business development is a whole of government approach. I say this is a whole of society approach. I am confident that if we will work together we will be able to enjoy a "matatag, maginhawa, at panatag na buhay".

Let us be productive citizens and a positive force for change that will lead us to achieving our vision of a Philippine society which is just and fair, which saves and shares, which is scientific and objective, safe and peaceful, educated and healthy, democratic, and which is, most of all, happy and free, with overflowing love of God and country.

Maraming salamat po at mabuhay ang Pilipinas!

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[1] https://tradingeconomics.com/philippines/ease-of-doing-business June 9, 2018

[2] http://business.inquirer.net/239704/philippines-ranking-world-bank-doing-business-2018 June 9, 2018