Policy reform notes

PHILIPPINES - In Brief 02 Apr 2023 by Romeo Bernardo

---

We turn our attention away from the banking turmoil in the west and look at some recent domestic policy developments. We find some of these good in terms of helping to improve the local investment climate, some less clear in terms of their economy-wide net benefit, and others, more distracting than helpful. We list them below in no particular order. The ratification of the Regional Comprehensive Economic Partnership (RCEP) by the Senate last February. It has been over two years since the 15 countries (10 members of the ASEAN plus Japan, China, Korea, Australia and New Zealand) signed the agreement. The RCEP binds its signatories to common standards, disciplines on intellectual property, rules of origin, customs processes, e-commerce, and competition policy. The hope is that with multinationals exploring alternative sites outside China, the Philippines could become a regional manufacturing and services hub that will help create higher quality domestic jobs. Opening up key sectors of the economy to full foreign ownership. Most prominent are: (a) the release of the Implementing Rules and Regulations (IRR) of the Public Service Act (PSA) one year after the law was signed[1] which would allow 100% foreign ownership of public services, including airports, railways, expressways and telecommunications; and (b) amendments to the IRR of the Renewable Energy Act[2] essentially allowing 100% foreign equity in renewable energy projects. The reform is seen to expand the local renewable energy market with foreign investments starting to come in.[3] A step in agricultural reform through the condonation of P57.6 billion of debts of agrarian reform beneficiaries (ARB), a majority of who...