Repeal ineffective, counter-productive laws, rules – NEDA
Repeal ineffective, counter-productive laws, rules – NEDA
The National Economic and Development Authority also supports an updated Foreign Investments Act

MANILA, Philippines – It is high time for the government to conduct a detailed and systematic appraisal of laws and other regulations to remove obstacles to the country’s competitiveness and growth, the National Economic and Development Authority (NEDA) said on Friday, June 11.

In particular, ineffective and counter-productive laws and regulations must be repealed to boost the Philippines competitiveness and spur investments, NEDA Director-General Arsenio Balisacan said.

“Existing regulations that are not responsive toward improving the ease of doing business in the country should be reviewed and amended,” Balisacan said in a position paper submitted in response to Senate Resolution (SR) No. 170 and No. 696 by Senators Miriam Defensor-Santiago and Grace Poe, respectively.

SR 170 directs the conduct of a Senate inquiry on strengthening the Philippines’ capabilities in doing business according to World Bank and International Finance Corporation standards.

SR 696, meanwhile, proposes the review of existing laws to consider the repeal of duplicate, irrelevant, and unnecessary regulations to streamline procedures, ease the cost of doing business, and sustain economic growth.

Balisacan added that proposed laws and regulations that impede trade, investment, and economic efficiency should also be eliminated.

Apart from the inclusion of implementing rules and regulations and relevant department orders or memorandum circulars in the review, NEDA also proposed the inclusion of a mandatory review clause in proposed laws, regulations, or other issuances.

NEDA said this would pave the way for the timely review of these instruments’ applicability and effectivity, or whether it is  time for them to be amended or abolished.

Well-intentioned but counter-productive

Balisacan said many laws are well-intentioned but turned out to be counter-productive or unenforceable. “Some have already become irrelevant or outdated.”

Thus, using regulatory impact assessments (RIA) would help ensure that laws and regulations are responsive to the country’s needs and do not impose unnecessary costs.

Balisacan added that the RIA and other such tools and mechanisms are important for determining whether a law or regulation is effective in achieving its stated objectives.

The NEDA chief noted that countries that have used RIA like Malaysia and Mexico have prove that the method is effective in improving regulations and in addressing issues of competitiveness and economic performance.

Countries that applied RIA have also consistently fared well in ease of doing business rankings

To date, NEDA, the departments of tourism and labor are undergoing capacity development activities on RIA, including the drafting of an RIA manual through the technical assistance program of the Asian Development Bank on Increasing Competitiveness for Inclusive Growth.

Review Foreign Investments Act

Complementing Santiago and Poe’s resolutions is SR No. 697, which moves for the conduct of a review and an omnibus study to eventually update Republic Act 7042 or the Foreign Investments Act of 1991.

Balisacan said that NEDA supports the review and update of the Foreign Investments Act, particularly the feasibility of adopting a general policy of openness, which includes lowering of tariffs and other barriers to trade, and expansions of areas open to foreign investment.

He added that although microenterprises and small and medium-sized domestic market enterprises or SMEs account for a large share of firms and employment in the country, their performance is affected also by barriers to entry and non-competitive behaviors in the market.

“We suggest revisiting restrictions on foreign participation in SMEs under Section 8 of the Foreign Investments Act, which effectively reserves SMEs to Filipino nationals, with some exceptions,” Balisacan said.

The NEDA chief stressed that if the country wants the investments, “we must continue pursuing the undertakings mentioned in the [Senate] resolutions as a venue to expand the institutionalization of RIA.”

On May 29, President Benigno Aquino III signed Executive Order No. 184 that provides the 10th Regular Foreign Investment Negative List, retaining mainly intact provisions of the preceding order, EO 98 of October 29, 2012.

The list of industries reserved for Filipinos under the 10th Regular Foreign Investment Negative List remained unchanged. This year’s list kept pharmacy, radiologic and X-ray technology, criminology, forestry and law as professions from which foreigners are banned.

The government, however, allows foreigners to practice various engineering disciplines, science-related professions, real estate services, and interior design, among others, “provided their country allows Filipinos to be admitted to the practice of these professions,” EO 184 said. –

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