EUROPEAN Union (EU) businesses, together with the Chambers of the EU-Philippines Business Network (EPBN), are proposing legislative reforms and operational changes to help improve the country’s competitiveness in the world market.
The group launched the 1st EPBN Advocacy Papers, a comprehensive book on nine cross-sector and 13 sector-specific industry-driven papers, focusing on the legislative and operational changes to boost the Philippines’ business competitiveness.
“In the past year, through the development of close partnerships between the partner chambers and by creating new synergies with external partners both in the Philippines and in the EU, the EU-Philippines Business Network has strived to support European businesses, and especially SMEs, to become part of and contribute to the Philippines’ rapid economic development,” European Chamber of Commerce in the Philippines (ECCP) president Michael Reuber said on Tuesday during the 2nd EU-Philippines Business Dialogue.
“Working towards a business environment which will serve to strengthen EU-Philippine trade and investment ties has never been more relevant,” Reuber said.
However, he said that while the Philippines is well on the way to becoming one of the major Asian players on the global market, “it is important that we make sure the foundations are laid that will translate rapid economic growth into long term sustainable and inclusive growth for all.”
“European business can and is willing to join hands with Philippine partner organizations and local companies, including SMEs, to achieve this goal by generating quality employment, transferring valuable technology and expertise, providing a wider choice of products in the market, which will benefit the quality and cost of products reaching the Filipino consumers,” Reuber said.
“However, if European businesses are to increase investment and strengthen trade with the Philippines, and in the process support sustainable and inclusive economic growth in the country, the Philippines needs to become a competitive environment for foreign business,” he explained.
In the 1st EPBN Advocacy Papers, European businesses suggested that legislative reforms that reflect changing market needs and match what competing markets are offering are crucial; a fair-competition law, the enactment of the Customs Modernization and Tariff Act, the adoption of the co-loading bill, and the removal of professions from the Foreign Investment Priority List (FIPL) need to be prioritized.
Similarly, liberalizing and modernizing the national procurement framework and maintaining investor-friendly incentives schemes are instrumental to attracting quality investment and trade partners.
This is in addition to all the operational level changes needed across industry sectors which will allow increased competitiveness.
“We could actually use it as a roadmap because of the comprehensive list,” DTI Secretary Gregory L. Domingo told reporters, referring to the advocacy papers.
Domingo said that European businesses can benefit along with the Philippines by adopting a “China plus one strategy,” noting that the Philippines is one of the EU’s top choices now for trade and with GSP+ it can be two-way, European firms can put up manufacturing facilities here and exports to the EU will be duty-free.
Under the “China plus one strategy,” firms invested in China diversify their investment destinations to reduce their overreliance on China.
During the recent Asean Summit in Malaysia, Domingo said he discussed with European Commissioner for Trade Cecilia Malmström the Philippines’ interest in having a free trade agreement (FTA) with the EU.
“They are still studying the Philippine case and they are making an assessment if the country can meet up with the high ambition of the EU,” Domingo said.
He said there are many areas of concern in an FTA deal, citing issues on intellectual property rights, environment, and labor. He noted that one of the primary issues that Commissioner Malmström mentioned regarding foreign investments was about constitutional restrictions.
On the other hand, he said the Philippines does not face the problem of other potential EU partners that still have state-owned enterprises (SOEs).
“We don’t have problem with that. We basically let go already, privatized all these big companies which were owned by the Philippine government, but they have partners with a problem with that,” he said.
“Our issues are relatively minor compared to those countries that have SOEs in all industries but with us, there are only some areas of restrictions,” Domingo said.