Viewpoint: Ramon R del Rosario Jr

Good governance and transparency are driving the change in the international perception of the Philippines and the resulting positive economic outlook. To strengthen this agenda we have been strong advocates of the Freedom of Information (FOI) Act, which will foster government transparency and accountability by allowing the disclosure of public documents and holding officials accountable for their actions. Although President Benigno Aquino III’s administration has adhered to these values, legislation would serve to institutionalise these gains for future administrations.

While government mechanisms are important, the private sector also needs to play a meaningful role. In that spirit, the private sector has worked to complement these efforts by developing the Integrity Initiative, which seeks to improve the business culture of the Philippines by establishing accepted and recognised standards. Participation in the initiative begins with signing a pledge, in which the signatory promises to be a good corporate citizen and behave in an ethical manner, with around 3500 signatories to date. The initiative also requires a self-appraisal system that measures compliance and adherence to a code of conduct that is both universal and particular, depending on the industry. In addition, we have engaged third-party enterprises to support companies that are working to improve their compliance and performance. Eventually, we want to move towards a scenario where we have the equivalent of an ISO certification for compliant firms.

In order for the pledge to serve as a meaningful mechanism for good governance, it needs significant government cooperation and support. A successful example of this is the Department of Public Works and Highways, which now requires contractors that want to do business with the government to sign the pledge and actively participate in the initiative. Similarly, the Department of Education and the Philippine Economic Zone Authority also require their suppliers and locators to participate in the initiative, demonstrating the kind of support and recognition we hope will become more widespread in government. It is crucial that the government recognises the private sector’s efforts, as participants in some industries may find themselves at a competitive disadvantage by following the rules – compared to players that, for example, do not pay the 12% value-added tax. We are hoping that the Bureau of Internal Revenue and the Bureau of Customs will institute initiatives such as green lanes to facilitate the movement of goods for recognised participants or a preferential lane for signatories to pay their taxes.

Although the Philippines has been marked by booms and busts, we are hopeful that the gains achieved in the past four years will be sustained. We have been strong advocates of measures in Congress to open up the economy. The first step will be to remove constitutional restrictions and create the opportunity for future legislation to open up specific sectors, such as public works, education or media, to foreign entities. Furthermore, a Fair Competition Bill will create a more level playing field and signal that uncompetitive behaviour is not the marketplace norm. While the details of the legislation are pending, the bill has long enjoyed the support of the country’s business community and is a measure many ASEAN nations require and expect.

With the Philippines hosting the Asia-Pacific Economic Cooperation Summit, it is a great time to signal to the world that we have the confidence to open up our economy. To generate more inclusive growth – which means more jobs – we need to accelerate the level of investment coming into our country and reverse our historically low foreign direct investment flows relative to the rest of ASEAN. At the end of the day, GDP growth will not have an impact on people’s lives unless there are jobs, and jobs will not be created without investment. We need to continue encouraging domestic investment, while simultaneously opening up to the rest of the world, particularly in areas where we need not just foreign capital, but also technology and expertise – both of which will strongly benefit the Philippines’ economy and foster greater global competitiveness.