Foreign chambers seek more reforms
Foreign business groups in the Philippines do not see yet a real economic bloc, or Asean Economic Community, emerging in late 2015.
The Joint Foreign Chambers says the lack of a unified set of regulations on how to manage the Asean regional economic community may sooner or later become a liability in reaching regional goals.
“There are no Asean laws. There are no Asean judiciaries. It is largely a secretariat than a regulatory or supervisory body. Integration is a very ambitious enterprise but it’s also weakly enforced,” said American Chamber of Commerce of the Philippines senior advisor John Forbes.
Despite the reduction or removal of tariffs, more hidden barriers still exist. An Asean single window that is supposed to expedite the clearance of cargoes among the Asean nations is still far from reality.
“Sadly, it almost does not exist here despite the fact that the Philippines is, allegedly, enforcing the national single window and when you check it out, you’ll find that most agencies still require paperwork,” said Forbes.
He says Asean seems to have “no teeth” in convincing the Philippines to open up its economy to foreign investors.
The chambers conceded, though, that the financial services have started to open up.
The Philippines recently passed amendments to the banking law that will allow not just Asean banks to invest but any foreign banks up to a certain definitive equity in the sector.
The groups noted services that other countries have agreed to open up, like maritime cabotage and aviation cabotage, but there is very little interest in the Philippines to open up its sector to other Asean shipping lines.
In the same way, the airlines in the Philippines require a majority national ownership, resulting in a very slow progress to open up the economy.
A recent study showed the Philippines had the most restrictions for foreign direct investments and the level of openness.
The foreign chambers are hoping the pending bill filed by House Speaker Feliciano Belmonte Jr. will “not take forever” to be approved. The bill seeks to amend the constitution to ease restrictions on economic provisions to attract foreign investments.
Both the local and foreign business communities have been supportive of the bill.
With foreign investments working its way into the Philippines in ways never seen before, the JFC considered it may be the start of the surge of FDIs into the country.
China, it said, was getting $100 billion while Asean was receiving $120 billion to $130 billion a year.
Foreign direct investments in the Philippines improve 20 percent in 2013 to $3.8 billion from $3.2 billion in 2011.