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ARANGKADA PHILIPPINES 2010: A BUSINESS PERSPECTIVE
Legislation
The Philippines has been praised among developing countries as having good laws, ones that
others have copied. A good example is the Philippine Mining Act of 1995 (RA 7942), considered
by international authorities as among the best anywhere. But there also are some laws that have
changed little over many decades, such as the Flag Law regarding government procurement, the
Public Service Act (CA 146 signed in 1936) concerning public utilities and franchises, and the
Philippine Immigration Act of 1940.
There is continual need to update old laws through amendments and periodic omnibus
revisions, as well as to legislate for new issues not covered by existing laws. Examples would be
the Rationalization of Fiscal Incentives, a comprehensive reform of 92 incentives scattered through
many old laws, and information technology bills dealing with issues that hardly existed a decade
ago.
The pace of legislation is usually measured, deliberate, and slow. See Table 70 for examples.
A bicameral legislative body is not designed to legislate rapidly. Bills must be passed separately
by both House and Senate, their differences reconciled in bicameral committee, and approved in
plenary before enactment. Speeding up legislation is cited by proponents of constitutional change
as one of the main reasons to return to a unicameral parliament.225
Only in the absence of a legislative body are laws passed quickly. Under martial law (19721980) and the post-EDSA people power revolutionary government (1986-1987) presidential decrees
and revolutionary executive orders, respectively, could be drafted, signed, and promulgated much
faster than under the post-1987 process. The Filipino people restored a bicameral Congress when
they approved the current constitution in a referendum in April 1987.
225
When former president Marcos lifted martial law in 1980 he restored a legislative body, which he had suspended in 1972, but made
it unicameral (the Batasan Pambansa).
DECEMBER 2010
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Occasionally bills can move through the
Congress in surprisingly short periods. Sometimes
these are bills introduced in successive Congresses
over many years without advancing, such as
the Civil Aviation Authority Act (RA 9497),
neglected for 15 years and enacted only after a
foreign government downgraded Philippine pilot
training under the old Air Transportation Office
(ATO). More recently, after the Organisation
for Economic Co-operation and Development
(OECD) in April 2009 put the Philippines on a
blacklist of countries uncooperative in providing
foreign tax authorities access to bank accounts of
their nationals, the Tax Information Exchange Act
(RA 10021) was introduced and passed in only a
year.
Figure 189: Editorial cartoon showing
Congressional failure to pass a
long-standing reform bill
Source: Philippine Star, May 26, 2010
Table 70: The pace of legislation, 12 bills in the 14th Congress
Bill/Act
Year Introduced
Date enacted/ legislative status
Years to enactment/
years pending
Bataan Freeport Zone Act
2006
October 23, 2009
3 (to pass)
13 (pending)
BSP Charter Amendments
1997
H-1st R, S-2nd R226
Civil Aviation Authority of the Philippines (CAAP) 1993
March 4, 2008
15 (to pass)227
Department of Information and Communications 2001 H-3rd R, S-2nd R
9 (pending)
Technology (DICT)
Eidul Adha Holiday
1998
December 11, 2009
enacted w/o consultation
Financial Rehabilitation and Insolvency Act 2000
July 18, 2010
10 (to pass)
Freedom to Access of Information
1992 H-failed to approve bicam report
18 (pending)
OECD Tax Information Exchange
2009
March 5, 2010
1 (to pass w/ external
pressure)228
Rationalization of Fiscal Incentives
1995
H-3rd R, S-2nd R
15 (pending)
Renewable Energy
1995
December 16, 2008
13 (to pass)
Reproductive Health
1995
H-1st R
5 (pending)
Red Tape Act
1988
June 2, 2007
19 (to pass)
Source: House and Senate Bills and Index offices
Investment Climate Legislation 2001-2010
Table 71 identifies significant business and economic reform laws enacted during the last three
Congresses from 2001 to 2010. The 12th Congress enacted 14 laws, the 13th Congress 6 laws, and
226
R = reading; all bills must pass three readings in committee and plenary in both House and Senate before they can be sent to the
president for signature.
227
After the US Federal Aviation Administration (FAA) downgraded the RP ATO, the CAAP passed the Congress rapidly, reportedly
following advocacy activity by Philippine airline companies.
228
In April 2009 the Philippines was included on a small list of countries that the OECD did not consider had adequate laws requiring
compliance with investigations by international tax authorities. The Secretary of Finance assured the OECD that remedial legislation
would be quickly passed, met with the House and Senate leaders, introduced DOF draft bills, which completed full congressional
hearings and readings and were enacted in less than one year.
316
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ARANGKADA PHILIPPINES 2010: A BUSINESS PERSPECTIVE
the 14th Congress 22 laws, for a total of 42 new business and economic reform measures. Figure
190 illustrates this data.
Table 71: Business and economic reforms laws, by Congress, 2001-2010
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16a
16b
17
18
19
20
21
22
23
24
26
27
28
25
29
30
31
32
33
34
35
36
37
38
39
40
41
42
Law
12th Congress (2001-04)
Alternative Dispute Resolution
Anti-Money Laundering Act of 2001 (AMLA)
AMLA amendments
Clean Water Act
Documentary Stamp Tax Rationalization
Domestic Shipping Development Act
Dual-Citizenship Act
Electric Power Industry Reform Act
Government Procurement Reform Act
Judiciary Compensation Rationalization Act
Optical Media Act
Restructuring Excise Tax on Automobiles
Securitization Act
Special Purpose Vehicle Act
13th Congress (2004-07)
Anti-Red Tape Act
Bases Conversion and Development Authority (BCDA) Amendments
Amnesty for Businesses in Special Economic Zones and Freeports
Biofuels Act
Expanded Value Added Tax
Lateral Attrition Act
Special Purpose Vehicle Act extension
14th Congress (2007-10)
Anti-Camcording Act
Bureau of Food and Drugs Act Amendments
Civil Aviation Authority
Cooperatives Code
Credit Information System Act
Customs Brokers Act Amendments
Documentary Stamp Tax Exemption (PSE)
Financial Rehabilitation and Insolvency Act
Individual Income Taxes Rate Exemption
JPEPA Ratification
Magna Carta for MSMEs Act Amendments229
National Grid Corporation Franchise
National Tourism Policy Act
Personal Equity Retirement Account (PERA) Act
Philippine Deposit Insurance Corp. Amendments
Pre-need Code
Real Estate Investment Trust (REIT) Act
Renewable Energy Act
Residential Free Patent Act
Revised Kyoto Convention (RKC) Ratification
Tax Information Exchange Act
Tax on Life Insurance Premiums
Law No.
Date Enacted
RA 9285
RA 9160
RA 9194
RA 9275
RA 9243
RA 9295
RA 9225
RA 9136
RA 9184
RA 9227
RA 9239
RA 9224
RA 9267
RA 9182
April 2, 2004
Sept 29, 2001
Mar 7, 2003
Mar 22, 2004
Feb 17, 2004
May 3, 2004
Aug 29, 2003
June 8, 2001
Jan 10, 2003
Oct 23, 2003
Feb 10, 2004
Aug 28, 2003
Mar 19, 2004
Dec 23, 2002
RA 9337
RA 9400
RA 9399
RA 9367
RA 9337
RA 9335
RA 9343
June 2, 2007
Mar 20, 2007
Mar 20, 2007
Jan 12, 2007
May 24, 2005
Jan 25, 2005
July 25, 2005
RA 10088
RA 9711
RA 9497
RA 9520
RA 9510
RA 9853
RA 9648
RA 10124
RA 9504
RA 9501
RA 9511
RA 9593
RA 9505
RA 9576
RA 9829
RA 9856
RA 9513
RA 10023
RA 10021
RA 10001
May 13, 2010
Aug 18, 2009
Mar 4, 2008
Feb 17, 2009
Oct 31, 2008
Dec 15, 2009
June 30, 2009
July 18, 2010
June 17, 2008
Oct 8, 2008
May 23, 2008
Dec 1, 2008
May 12, 2009
Aug 22, 2008
Apr 29, 2009
Dec 3, 2009
Dec 17, 2009
Dec 16, 2008
Mar 9, 2010
February 1, 2010
Mar 8, 2010
Feb 23, 2010
Source: House and Senate Bills and Index offices
229
The bill allows foreign banks the same five year period as domestic banks to obtain optimal value in foreclosure proceedings
involving real estate, while respecting the constitutional provision on land ownership. Other provisions of the bill requiring mandatory
lending are disadvantageous to foreign banks.
DECEMBER 2010
317
37
Real Estate Investment Trust (REIT) Act
38
Renewable Energy Act
39
Residential Free Patent Act
40
Revised Kyoto Convention (RKC) Ratification
41
Tax Information Exchange Act
42
Tax on Life Insurance Premiums
Joint Foreign
Chambers Source: House and Senate Bills and Index offices
RA 9856
RA 9513
RA 10023
RA 10021
RA 10001
Dec 17, 2009
Dec 16, 2008
Mar 9, 2010
February 1, 2010
Mar 8, 2010
Feb
23, 2010Paper
Advocacy
ARANGKADA PHILIPPINES 2010: A BUSINESS PERSPECTIVE
Speeding up the pace of enactment of new laws and amending old ones should be a goal of
the new Philippine administration. If in the 14th Congress 22 business and economic reform bills
Figure 190: Business and economic reforms
were enacted, perhaps this is a good reason to
Figurelaws,
190: by
Business
and economic
reforms
Congress,
2001-2010
believe that the 15th Congress will pass many
laws, by Congress, 2001-2010
more than that number. While this would be a
25
22
remarkable amount of progressive legislation, it
20
could improve the Philippine economy and its
14
inter-national competitiveness rankings, while 15
inducing investment and creating jobs. With 10
6
strong leadership and cooperation between the 5
executive and legislative branches, it should 0
be possible to vastly improve the pace of
12th (2001-2004)
13th (2004-2007)
14th (2007-2010)
legislation.
Source: AmCham Philippines
Table 72 lists 6 laws that almost reached enactment in the 14th Congress. Because hearings and
floor consideration for most of these were completed in the 14th Congress, it may be possible to
enact them early in the 15th Congress. Six Philippine business groups and the seven JFC members
wrote President Aquino in July 16 recommending early pass of these six measures.
Table 72: Priority bills nearly-enacted, 14th Congress
Bill
Final status
1
Cybercrime Act
Passed H; S – pending 2nd reading
2
DICT
Passed H; S – pending 2nd reading
4
The bill allows foreign banks the same five year period as domestic banks to obtain optimal value in foreclosure
3
Freedom
of
Access
to
Information
Passed
S; no Honquorum
to approve
bicam
report of
proceedings involving real estate, while respecting the constitutional
provision
land ownership.
Other
provisions
4
Immigration
Bill
Passed
S;
no
H
quorum
to
approve
bicam
report
the bill requiring mandatory lending are disadvantageous to foreign banks.
5
Rationalization
of
Fiscal
Incentives
Passed
H;
S
–
2nd
reading
____________________________________________________________________ 318
6
Simplified Net Income Taxation Scheme (SNITS) Passed H; S – pending Committee
AUGUST 2010
Source: House and Senate bills and index offices
Table 73 is a list of 41 reforms for consideration in the 15th and 16th Congress. The list is
organized into eight categories according to the Seven Big Winner sectors and General Business
Environment. It was arrived at by a group of five Philippine business groups and the seven JFC
members and has been recommended to the president, the Senate president and the House speaker.
As explained below, some could first be addressed in executive orders, with laws to follow.
Most of these proposals are not controversial, and could, with strong executive and legislative
leadership, be enacted over the next few years. Annex 4 contains a list of other potential reform
laws.
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Table 73: Proposed legislation for the 15th Congress230
Legislative Priority
Description231
Proponent
Agribusiness
1
Agri-Agra and MSME Magna Carta
Amendments
Makes 25% mandatory lending optional. Relieves foreign banks, (which are not located
in rural areas) of mandated Agri-agra/MSME
loans. (nyd)
FGD, BAP
2
Allows aggregation of land for corporate
farming. (nyd)
FGD, PCCI
CARP beneficiaries may borrow, using their
land as collateral (HB 32, 2707, 3368)
FGD, CSPW,
Philexport
Comprehensive Agrarian Reform Program (CARP) reform
3
Farm Land as Collateral Act
4
Land Administration Reform Act Rationalizes agencies dealing with land titling.
(LARA) 5
Rice and Corn Trade Amendment (PD194)
6
MBC, JFC/PBG,
CSPW
Removes divestiture requirement.
Draft available
Business Process Outsourcing
Cybercrime Act
(H passed HB 6794;SB 3553 2nd R)
FGD, CICT, BPAP
7
Data Privacy Act
(HB 2682; SB 3129)
FGD, DTI, JFC, BPAP,
CSPW
8
Department of Information and Communications Technology (DICT) Strengthens CICT and raises public sector
focus on e-governance.
(H passed HB 4300; SB 2546)
FGD, CICT, BPAP,
CSPW, UPOU
9
Holiday Rationalization
Limits total number of non-working holidays.
(nyd)
FGD, BPAP, Philexport
10 Labor Code Amendment (Art 130) Removes prohibition on nightwork by women. (HB 2071)
FGD, JFC, BPAP,
ECOP, PCCI
Creative Industries
11
Creative Industries Development Council
(SB 2131)
FGD, DTI
12
Foreign Professional Omnibus Amendments
Simplifies 45 laws regulating 46 professions to
relax restrictions on foreign professionals and
redefine reciprocity. (nyd)
JFC
13 WIPO Copyright Treaty Act
Amends IPR Code to conform with the World
Intellectual Property Organization (WIPO)
Copyright Treaty and the Performances and
Phonograms Treaty (HB 3471; SB 880)
Infrastructure
14 BOT Law Amendments (HB 3763) FGD, JFC/PBG, MBC, DTI, CSPW
15 Convergence Act
Amends RA 7925 Telecom Policy.
(HB 7151; SB 608, 2145)
16
Energy Efficiency and Conservation
Act
Institutes initiatives as well as application of
technology on efficient energy use. (nyd)
17
EPIRA Amendments
(HB 3124; S passed SB 2121)
DOE
Promotes natural gas as an efficient and economical source of energy and facilitates
private sector participation. (HB 4754)
DOE
18 Natural Gas Bill
DOE, FGD, JFC
230
Not all proposed bills cited in the list have been fully reviewed and may not be completely supported in the cited versions of the
proposed laws. “Nyd” means not yet drafted.
231
When not clear from common title. Bills cited were introduced in the 14th Congress. When no bills are cited, authors are unaware
of any draft legislation.
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19 Maritime Law (cabotage)
(HB 87, 76, 6828; SB 1378, 844) 20 Public Utilities Act Amendments Amends definition of public utilities to exclude
certain activities currently subject to foreign equity restrictions. (nyd)
21 Water Reform Act (Water Code PD Creates Department of Water. Rationalizes
1067 - 1976)
numerous water institutions. Ensures efficient
management of water resources. (nyd)
Manufacturing
22 Clean Air Act (RA 8749) Amendment Allows high tech incineration (revise standards)
(nyd)
23 EVAT on Fuel and Power Exemption Increases competitiveness of local Eternal taxes rebate manufacturers for export and other purposes.
(nyd)
Mining
24 Mining Act Amendments
Disallows LGUs from banning mining; reduce US$ 50 million threshold for large/small-scale
mining. (RA 7076) (nyd)
25 LGU, Automatic Retention of LGU (HB 3993; SB 3381)
Shares in Mining, Taxes, Fees, and
Royalties bill
Tourism
26 CIQ Amendment (Immigration Act Customs, Immigration and Quarantine (CIQ)
and Customs Code)
overtime charges should be no cost to private
sector. (nyd)
27 Common Carriers Tax Amendment
Amends Internal Revenue Act of 1997 to
(Section 118) remove tax on foreign, but not domestic airlines.
(nyd)
28 Gross Philippine Billings Amendment Amends Internal Revenue Act of 1997 to
(RA 9294/9337)
remove 2.5% tax on international flights (nyd)
29 Senior Citizens Act Amendment
Allows foreign residents to avail of same
discounts as Filipinos. (nyd)
General Business Environment
30 Anti-Trust Act (competition policy)
(S passed SB 3197)
31 Bank foreclosure law (RA 133), Allows foreign banks to bid and take possession
Foreign bank entry liberalization law of land (w/o transfer of title). Removes limit on
(RA 7721), Rural Act of 1992 (RA number of branches of foreign banks. Allows
7353) amendments
foreign banks to own rural banks. Partial draft
available.
32 BSP Charter Amendments
(HB 5958, 6334; SB 871)
33 Customs and Tariffs Modernization Replaces Anti-Smuggling Act. (HB 5342)
Act
34 Fiscal Responsibility Act Specifies principles of responsible financial management in public sector revenue,
spending, and borrowing.
35 Foreign Investment Act Amendments Removes several rules placed only on foreign
equity. Lowers minimum paid-in capital. (nyd)
36 Labor Code Amendment (Art 106 to Revises contracting/ subcontracting policy.
109)
(nyd)
DTI, Philexport
JFC, two presidential
commissions232
DTI, FGD, CSPW
JFC, PCCI,FPI
FGD, Philexport
FGD
FGD, PCCI
FGD, PCCI
FGD, PCCI
FGD, PCCI
FGD
DTI, CSPW, UPOU
CMDC
JFC/PBG, CSPW
FGD, DOF, DTI
DOF, JFC, UPOU,
CSPW, Philexport, OPPPLO
ECOP
232
December 1999, “Report of the Preparatory Commission on Constitutional Reforms” and December 2005, “The Proposed
Revision of the 1987 Constitution by the Consultative Commission, with Highlights and Primers on the Major Proposals and Background
Information on the Consultative Commission.”
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37 Labor Code Amendment (Art 278 to 286)
38 Procurement Law Amendments
39 Rationalization of Fiscal Incentives233 40 Retail Trade Act Amendment 41 Tax Sector Neutrality Act Facilitates termination of employees w/o
showing cause on payment of a severance
benefit based on legislated formula. (nyd)
Improves procedures for transparent public sector procurement of goods and services.
Reduces discrimination against foreign
suppliers.
Rationalizes incentives granted by 92 different laws; establishes rules for future fiscal incentives. (HB 5241; SCR 784)
Allows foreign retail trade investment when
meeting conditions in Foreign Investment Act
(RA 7042). (nyd)
Rationalizes numerous small fees and taxes on financial transactions. draft available
FGD, PCCI
MAP, OP-PLLO
FGD, DOF. DTI, JFC,
PBG, UPOU, CSPW,
OP-PLLO
JFC/PBG, CSPW
Sources of cited measures include past positions of the JFC and Philippine business groups; JFC Seven Big Winner focus group discussions
conducted in late 2009 and early 2010; Focus Group Discussion: Philippine Investment Climate (PCCI, May 20, 2009); Barriers to Foreign
Participation in the Philippine Economy: Formal and Informal Discrimination Against Foreign Investment, Professionals and Trade, (unpublished
study, 2008); Gearing Up the Nation for Growth and Competitiveness (Congress Secretariat Planning Workshop, House of Representatives,
July 2007); Sustaining the Growth, Spreading the Benefits (Office of the Speaker, House of Representatives, March 2008), Legislative
Measures and Their Status, 14th Congress (Department of Finance, February 2010); Economic Reforms for Philippine Competitiveness
(University of the Philippines Open University, 2010); and presentations at three Legislative Workshops held at AmCham in February, March,
and April, 2010 by experts from the House, Senate, Office of the President, DOF, DTI and the University of the Philippines.
Use of a presidential executive order or a department administrative order can hasten the
introduction and implementation of a reform. Often within months of the executive branch decision,
a new policy can be implemented by the bureaucracy. For important issues enactment of a law
should eventually follow.
Congress also sometimes legislates market-unfriendly laws. These have been enacted by the
president in most instances, often allowing the measure to lapse into law by not signing. Presidential
vetoes are rare, as objections by the executive branch to a bill moving through the Congress are
usually accommodated during the legislative process. Table 74 lists market-inimical laws enacted
in recent congresses.
Table 74: Market-inimical business and economic reforms laws, by Congress, 2001-2010
1
2
Law
12th Congress (2001-04)
Legislated Wage Hike
Law No.
Date Enacted
HB 2605
13th Congress (2004-07)
Strengthening Workers’ Right to Self-Organization
RA 9481
May 25, 2007
3
4
5
6
7
14th Congress (2007-10)
Agri-Agra Law Amendments
Aurora Pacific Economic Zone Act
Bataan Freeport Area Act
Cheaper Medicines Act
Eidul Adha Holiday223
RA 10000
RA 10083
RA 9728
RA 9502
RA 9849
Feb 23, 2010
Apr 22, 2010
Oct 23, 2009
June 6, 2008
Dec 11, 2009
233
Common name for “Investment and Incentives Code of the Philippines Act”
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8
9
10
11
12
13
14
EPIRA Amendments
Expanded Senior Citizens Act
Income Tax Exemption and Condonation of Unpaid Taxes of Local Water Districts
Milk Code Amendments
Reducing Malampaya Gas Royalty
Security of Tenure
Uniform Franchise Tax on Utilities
Source: House and Senate Bills and Index offices
SB 2121
RA 9994
RA 10026
Feb 15, 2009
Mar 11, 2010
HB 7022
SB 3282
HB 6532
SB 3147
LEDAC
The Legislative Executive Development Advisory Council (LEDAC) was initiated during
the Ramos Administration. The president and cabinet secretaries usually met with congressional
leaders every two weeks both to establish legislative priorities and to discuss the status of the
priority legislation in the House and Senate.
During the two subsequent administrations
the LEDAC met less regularly. The Executive
DRAFT
September
2010 priority legislation, and the president
Secretary’s office nevertheless maintained
a list of13,
LEDAC
Distribution
JOINT
FOREIGN
CHAMBERS
PAPER
continued
to designate
bills as “urgent”Not
in for
order
to speed their passage.ADVOCACY
However, for the
last 12
2010:the
A BUSINESS
PERSPECTIVE
years, the ARANGKADA
LEDAC has been PHILIPPINES
less active than during
Ramos Administration
(see Figure 191). Its
________________________________________________________________________
revival should be considered as an effective means of advancing the legislative priorities of the new
administration during the 15th Congress (2010-2013) and the 16th Congress (2013-2016).
Figure
Number
LEDACmeetings
meetings per
per administration,
administration, 1992-2010
Figure
191:191:
Number
of of
LEDAC
1992-2010
Arroyo (2001-2010)
25
Estrada (1999-2000)
3
Ramos (1992-1998)
81
0
10
20
30
40
50
60
70
80
90
Source: LEDAC Secretariat
192:
Editorial
cartoon
showing
need
Congress
Figure 192:Figure
Editorial
cartoon
showing
need for
Congress
to for
address
the country’s woes
to address the country’s woes
Source: Philippine Star, July 28, 2010
DECEMBER 2010
322
Source: Philippine Star, July 28, 2010
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ARANGKADA PHILIPPINES 2010: A BUSINESS PERSPECTIVE
Headline Recommendations
1.
The president should hold regular LEDAC meetings of executive and
congressional leaders. LEDAC should prioritize the administration’s legislative
agenda and monitor its progress throughout the legislative process.
2.
Prioritize bills that improve competitiveness, increase investment and revenue,
and create jobs, in order to accelerate economic growth. Use executive orders
and revision of IRRs to start reforms, following up with legislation as needed.
Deter market-inimical bills.
3.
Pass legislation much more rapidly, especially for business and economic
reforms. Prioritize key legislation that was close to final passage in the 14th
Congress or that reached 2nd/3rd reading in either the House or the Senate.
Recommendations: (13)
A. The president should hold regular LEDAC meetings of executive and congressional leaders.
LEDAC should prioritize the administration’s legislative agenda and monitor its progress
throughout the legislative process. (Immediate action OP and Congress)
B. Prioritize bills that improve competitiveness, increase investment and revenue, and create
jobs, in order to accelerate economic growth. The chairs of the committees to which such bills
are referred can be asked to conduct hearings and complete their committee reports in the early
months of the 15th Congress. Deter market-inimical bills. (Immediate action LEDAC and
Congress)
C. Pass legislation much more rapidly, especially for business and economic reforms.
Prioritize “low-hanging fruit” legislation that was close to final passage in the 14th Congress or
that reached 2nd or 3rd reading in either the House or the Senate. (See Table 72) (Medium-term
action Congress)
D. Set a target to pass many more investment climate reform bills in the 15th and 16th
Congress. (See Table 73 for potential bills) (Medium-term action Congress)
E. Use executive orders to introduce reforms quickly. Follow-up as needed with laws to make
the reforms more permanent. (Immediate action OP and executive branch departments)
F. Revising Implementing Rules and Regulations (IRRs) of laws and executive orders is another
way to achieve reform. For example, removing the 60-40 equity provision of the Renewable
Energy Act and completing the amendments of the BOT Act can encourage more investment
in renewable energy projects and public-private partnerships. (Immediate action NEDA, DOE,
DOF)
G. The Executive Secretary should assess how a bill passed by Congress affects competitiveness
and job creation. The assessment should be made public. (Immediate action OP)
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H. Seek to make the Foreign Investment Negative List (FINL) more positive, thereby leveling
the playing field for foreign investors. Review all restrictions in the FINL to determine which
continue in the national interest and recommend changes in those considered to be out of
date. Implement the recommended changes. (Medium-term action OP, NEDA, DTI and other
agencies, Congress, and private sector)
I. Simplify the present 45 laws regulating 46 professions to relax restrictions on foreign
professionals and redefine reciprocity. Draft and seek passage of an omnibus law amending
the present restrictions and establishing a uniform policy consistent with the current role of
Philippine professionals in the global workplace. (Immediate action PRC and Congress)
J. Clarify that foreign investors can own firms providing services of PRC-certified professionals
as long as the requirements of the Foreign Investments Act of 1991 (RA 7042) are met (US$
100,000 paid-in capital and 50 employees). (Immediate action DTI and PRC)
K. Seek to reduce and remove discrimination against foreign firms in Philippine government
procurement laws, regulations, and practices, bringing them into conformity with international
best practice.234 Encourage the GRP to adhere to the WTO Agreement on Procurement.
(Immediate action NEDA, DTI and Congress)
L. Encourage new investment in selected regulated public utility activities by using language
similar to Section 6 of the EPIRA (RA 9136), which clearly states that power generation
shall be competitive, not be considered a public utility, and not require a franchise. (Immediate
action NEDA, DOJ, and relevant departments)
M. Develop a comprehensive Philippine Legal Code and Code of Regulations to create an
inventory of laws and regulations. Make the inventory accessible on the internet. The Civil
Code (RA 386) was signed in 1949. (Medium-term action by DOJ, Congress, and private
sector)
234
The Government Procurement Reform Act of 2003 (RA 9184) covers procurement by all government offices and corporations. RA
9184 designates competitive bidding as the method of procurement. While goods may be obtained from either local or foreign suppliers,
preference may be given to domestically-produced and manufactured goods that meet the specified standards (Article XII, Section 43).
GOCCs can be awarded government contracts without going through the bidding process. The IRRs for RA 9184, revised in 2009,
contain provisions regarding procurement which favor local goods and service providers.
For infrastructure projects contracted to the private sector, the BOT Law of 1990 (RA 6957) provides for the employment of
Filipino labor in different phases of the construction phase (Section 2-a) which is re-affirmed in the Amended BOT Law of 1994 (RA
7718). Moreover, for infrastructure projects that require a public utility franchise, the facility operator must be at least 60% Filipinoowned (Section 2-a).
CA 138 (also known as the Flag Law of 1936), wherein the procurement of supplies, materials or public works for public use shall
be purchased from domestic suppliers. In the case of public bidding, the award shall be given to the domestic entity making the lowest
bid (Sections 3 & 4).
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DECEMBER 2010