Yao stresses need for Fair Competition Act, customs reform before mid-2016
The Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business organization, expects President Benigno Aquino 3rd to step up reforms during the final year of his term.
PCCI President Ambassador Alfredo Yao told reporters the main reforms they are expecting from the government are the president’s signing into law of the Fair Competition Act, the Customs Modernization and Tariff Act, and the Comprehensive Tax System Reform.
“This law will push businesses to engage in a healthy rivalry so that they will gain more consumers. It gives us the incentive to be more efficient, and to offer the public better quality products and services,” Yao said.
Once the Fair Competition Act passes, it will create an independent Philippine Competition Commission to be composed of one cabinet secretary-level chairman and four commissioners serving for seven years without reappointment.
The Fair Trade Act provides penalties for prohibited anti-competitive agreements, mergers or acquisitions that substantially restrict competition, and abuse of dominant position.
Under the new law, administrative fines of up to P250 million may be imposed, with the amounts subject to adjustment every five years. Criminal penalties are punishable by imprisonment of up to seven years.
“We have long held that anti-competitive behavior is injurious to a strong economy because an uneven playing field contributes to inefficiency and the misallocation of resources,” said Yao.
“When it becomes law, the Fair Trade Act allows even small firms entry into the market with the expectation that rules will be applied equally to all,” he said.
“When businesses engage in unfair practices just because they can, because they do not have anyone competing with them for consumers, it is really the consumer who suffers through high prices and limited choices,” he added.
Yao said that modernization of the customs bureau will include the full utilization of the ports of Batangas and Subic to ease port congestion.
“You have to create a market. For example, a ship will go there then will unload 10 containers. You have to pay the same port services when you unload 1,000 containers. No one is going there as long as there is no market,” he said.
“It’s a vicious cycle,” said Yao. The main reason no one is really coming to the other ports is because there are no clients, that is why the system must be improved, he explained.
Yao said the port congestion is still there but the system should be improved, at least, so it does not worsen.
“But sooner or later, we will have the same problem again because the economy keeps improving. Then you have the traffic, everything is going inside Manila, especially during fourth quarter or during the Christmas season. Port congestion can happen overnight,” he added.
The PCCI president recommended that the Manila Port should be used mainly for tourism like cruise lines.
“We are 100 percent relying on the port of Manila, which is very hard. Everything, let’s say Caloocan, Valenzuela will need to go inside Manila and traffic will go with it. If you have a plant in Laguna everything will pass through Manila,” he said.
“Why don’t you use the two ports of Batangas for South Luzon then Subic for North Luzon? Then if it is for Manila, use the Port of Manila,” he added.
Yao also suggested expanding the Batangas port to accommodate more containers. He said the place has less traffic and it is outside the Metro Manila so it is more conducive.
“The government should be the one to take the lead in expansion. That is where the political will comes in,” he said.
“Also, the airport should be transferred to Clark because no matter what you do, at the Manila airport, you will still pass by the informal settlers, unlike Clark which is beautiful,” he added.
To improve the connectivity, the country needs a fast rail system, Yao explained.
“The government can easily fund and build that project,” he said.
He added: “If the government decided to sell the 400 hectares of Manila airport property for at least P60 million per hectare, the government will have P240 billion more, enough to fund the fast rail project.”