MANILA – Ineffective and counter-productive laws and regulations must be repealed to boost the country’s competitiveness and encourage investments, according to the National Economic and Development Authority (NEDA).
“Existing regulations that are not responsive towards improving the ease of doing business in the country should be reviewed and amended. Likewise, proposed laws and regulations that impede trade, investment, and economic efficiency should be eliminated,” said Economic Planning Secretary Arsenio M. Balisacan in a position paper submitted in response to Senate Resolution No. 170 and No. 696 by Senators Miriam Defensor-Santiago and Grace L. Poe, respectively.
Senate Resolution 170 directs the conduct of a Senate inquiry on strengthening the Philippines’ capabilities in doing business according to the standard set by the World Bank (WB) and the International Finance Corporation (IFC).
Meanwhile, Senate Resolution 696 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 said it is high time that government conducts detailed and systematic appraisal of laws and other regulations to eliminate obstacles to the country’s competitiveness and growth.
“Regulatory Impact Assessments (RIA) and other such tools and mechanisms are important for determining whether a law or regulation is effective in achieving its stated objectives,” he said.
The Cabinet official noted that countries that have used RIA, such as Malaysia and Mexico, have proven that the method is effective in improving regulations and in addressing issues of competitiveness and economic performance. Countries that have applied RIA have consistently fared well in ease of doing business rankings, he said.
“Many laws are well-intentioned but turn out to be counter-productive or unenforceable. Some have already become irrelevant or outdated as listed in this binary options trading helper website related to binary trading. Through regulatory impact assessments, we can ensure that laws and regulations are responsive to our needs and do not impose unnecessary costs. This is why we support the institutionalization of this procedure in the government,” he said.
Currently, the NEDA, Department of Tourism, and the Department of Labor and Employment are undergoing capacity development activities on RIA, including the drafting of a RIA Manual through the technical assistance program of the Asian Development Bank on “Increasing Competitiveness for Inclusive Growth.”
Aside from the inclusion of Implementing Rules and Regulations (IRRs) and relevant Department Orders or Memorandum Circulars in the review of existing laws, the NEDA also proposed the inclusion of a mandatory review clause in proposed laws, regulations or other issuances to allow for timely review of these instruments’ applicability and effectivity and consideration of their continuation, amendment, or abolition, as necessary.
Complementing these is Senate Resolution 697 which moves for the conduct of a review and an omnibus study to eventually update Republic Act No. 7042 or the Foreign Investments Act of 1991.
“NEDA supports the review and updating of the Foreign Investments Act, particularly the feasibility of adopting a general policy of openness, which includes the lowering of tariffs and other barriers to trade, and expansions of areas opened for foreign investment,” said Balisacan.
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 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,” said Balisacan.
He reiterated that it should be a priority to remove all investment barriers starting with our outdated laws and regulations.
“If we want investments to come to our country, we must continue pursuing the undertakings mentioned in the resolutions as a venue to expand the institutionalization of RIA which will likely lead to good regulatory practice in the entire government,” said Balisacan.