Amendments on laws hampering liberalization play a role in improving the business environment for the country to expand its contributions to trade in services while supporting its own economy as it ratified the Regional Comprehensive Economic Partnership (RCEP).
Dr. Tereso Tullao Jr., university fellow and professor emeritus at De La Salle University-Manila, said making the country attractive to foreign investors and liberalizing professions are being addressed by the amendments to the Public Services Act (PSA).
“Foreign investors can bring the following that the Filipinos can learn from, acquire, and adopt: multitude of technologies and innovations, streamlined business practices, (and) relatively wider networks and value chains,” he said in a webinar organized by the Philippine Institute for Development Studies (PIDS).
According to the National Economic and Development Authority (NEDA), the amendments to the PSA shall enable the liberalization of key public services by allowing full foreign ownership of businesses in select industries such as airports, railways, expressways, and telecommunications. Prior to the approval of the amendments, foreign ownership in these industries was limited to 40 percent.
To harness the opportunities in trade in services brought about by the RCEP, Tullao also highlighted the need to strengthen linkages, reform domestic regulations, and liberalize professions; and use mutual recognition arrangements (MRAs) and domestic regulations to advance human resource development.
He said liberalizing professions, where the Philippines has inadequate supply of, may stimulate skills-based growth as more professionals can take part in key sectors that promote faster local productivity growth.
“We may liberalize and we may be compliant and comparable in terms of our professionals but there are domestic regulations rooted on Constitutional provisions that the economy should be controlled by Filipinos and the practice of professions will only be done by Filipino professionals,” he added.
Tullao said the passage of the amendments to the PSA is addressing market access and national treatment limitations, and weaknesses in construction and telecommunications.
“Market access and national treatment limitations impede the entry of entities who can provide the Filipino infrastructure that will facilitate higher productivity and accelerate economic growth,” he said.
Tullao and John Paolo Rivera, associate director at Asian Institute of Management’s Dr. Andrew Tan Center for Tourism, authored a recent PIDS discussion paper “Opportunities for the Philippines under RCEP: Trade in Services.”
The paper said the Philippines has certain laws that may relax constitutional constraints and accommodate some degree of further liberalization.
It also passed the amendments to the Retail Trade Liberalization Act and the Foreign Investment Act. The Supreme Court (SC) also made rulings to pursue liberalization.
The Senate concurred in the RCEP ratification on Feb. 21, 2023, two years after the RCEP participating countries concluded the negotiations in November 2020.
Tullao said RCEP is the largest free trade area in the world today, comprising 15 economies in the region, comprising 28 percent of total global trade and total global output, and accounting for 30 percent of the world’s population.
CURRENTPH NEWS SERVICE