Press Releases Archived (October 2015)

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State think tank Philippine Institute for Development Studies (PIDS) and Griffith Asia Institute (GAI) of Griffith University held a forum focusing on building stronger economic partnership, disaster risk mitigation, and women empowerment - issues of mutual interest to both the Philippines and Australia.

With the theme "Economic Diplomacy and the APEC Agenda", PIDS and GAI hoped this policy dialogue could contribute in raising awareness of the strong economic partnership between the two countries, and in identifying new areas of cooperation. Both PIDS and GAI are members of the APEC Study Center Consortium that provide opportunities for collaborating in research on APEC issues.

In his opening statement, PIDS President Dr. Gilberto Llanto said PIDS and GAI could work together in producing policy relevant research on a range of development issues, namely innovative resilience and disaster response, and regulatory reforms.

Climate change is one area of sustainability that is prioritized by the Australian agenda that the two countries can continue to work on together.

"We could learn from Australias experience in disaster funding in the context of its advanced governance systems. For a country perennially beset by disasters, it is important for the Philippines to develop resilient systems that have the capacity to mitigate adverse shocks, to rebuild after shocks, and to move forward," Llanto added. .

Professor Russell Trood, Director of the GAI, remarked that it was a pity most people in Australia and the Philippines normally do not think of each other first when it comes to regional cooperation despite having plenty of common interests.

Towards that goal the GAI, according to Trood, has run a series of policy dialogues with several Asian countries over a wide range of issues.

Australia and the Philippines have already built collaborative linkages in the areas of policy, disaster preparedness, the Mindanao Peace Process, and governance reforms. Beyond government, there has also been an observable increase in the amount of people to people relationship, from academic and professional linkages to tourism.

Ambassador Laura Del Rosario, Foreign Affairs Undersecretary for International Economic Relations, buffed up the testimonials for Australias record in the Philippines.

"Australia is a moving force," she claimed upon recalling that Australia was the first to broach the idea of APEC.

Meanwhile, Deputy Head of Mission of the Australian Embassy-Philippines Dr. David Dutton said that the Philippines is at an interesting time in its history.

"The passing of several governance reforms and the continued economic growth averaging at six percent have signified the countrys commitment and readiness to move forward. Australia intends to find out how it can be part of the Philippines path to progress," Dutton said.

The discussions focused on strengthening economic diplomacy between the Philippines and Australia as well as on the APEC 2015 Agenda on building resilient communities and empowering women. The sterling roster of speakers included Paul Hutchcroft, lead governance specialist from the Australian Embassy in the Philippines, Hon. Joey Salceda, governor of Albay, and Ms. Pacita Juan, president of the Womens Business Council of the Philippines.

On economic diplomacy

Australia continues to work with the Philippines by focusing its new aid policy on enhancing foundations for economic growth through infrastructure, building stronger institutions for good governance, and participating in issues on peace and stability.

In his presentation, Hutchcroft illustrated the bilateral relations between the Australia and the Philippines. In terms of trade, Hutchcroft stated there are over 200 Australian companies currently in the Philippines. Australian direct investment, which is mainly in information technology-business process management, mining, and oil and gas exploration, has doubled since 2010. Two-thirds of Australian exports to the Philippines are metal ores and food products. The Philippines, on the other hand, exports services in manufacturing, tourism, and education.

Hutchcroft likewise highlighted the areas where the Philippines needs to improve. "Anyone who has worked in the Philippines knows that the country is notorious for underspending. The Philippines also has to resolve issues like providing access to basic resources in rural areas," he commented. He also emphasized the role of knowledge transfer, underscoring how increased information and knowledge exchange can help in these areas, as well as areas like developing small and medium enterprise access to finance, infrastructure, and disaster reduction and risk management.

Dr. Myrnia Austria, professor at De La Salle University, concluded that the main challenge for a country that has experienced significant growth is sustaining that growth and making it more inclusive. Dr. Tapan Sarker, a research fellow at the Griffith Asia Institute, reckoned that the Philippines and Australia are on the right path in choosing to address resources constraint together.

Australia and the Philippines share a strong history in the areas of security, having fought in World War II together. They are also engaged in bilateral exercises over issues like disaster recovery and rescue, defense and coast watch, and the building up of the Philippines institutional capacity together.

Mr. Julio Amador, deputy director-general of the Foreign Service Institute of the Department of Foreign Affairs encouraged both countries to deepen their cooperation level through enhanced consultations and more regular meetings between ministers over these issues.

On disaster risk reduction and resilience

Albay Governor Joey Salceda painted the picture of disaster risk reduction and resilience and climate at a local level.

Salceda explained that Albays priority development agenda is characterized by transformative polices and program, a green economy, and the integration of disaster resilience and risk reduction into the cultural fabric.

"Disaster risk reduction in Albay is as ordinary as going to the bathroom," said Salceda, who urged policymakers to prioritize the principle of building better, instead of building back better. Albays policy decision and program planning framework are all based on scientific evidence and rigorous risk assessment.

But beyond the planning aspect, Salceda added, "The only chance for reforms to take root is if they trust their government."

All sectors in Albay have been nurtured to work together. Dr. Susanne Becken from GAI explained in her discussion how a well-coordinated inter-sectoral action can help create a more resilient industry in all levels of the community.

In the tourism industry, according to Becken, there are four classic levels where disaster response and risk reduction should be improved to make any disaster policy or program effective. Tourists, businesses, destination countries, and national planning must all reflect an alignment of efforts to be able to fully carry out disaster response, resilience, and recovery.

Collaboration for inclusive growth

In the final session of the forum, Pacita Juan of Womens Business Council of the Philippines, explored different case studies showing how empowerment of women can evidently make economic growth more inclusive. Empowerment must go beyond improving womens access to finance, according to Juan. It is important to teach women in business how to make decisions about their finances.

Juan added that leaving women out of the growth machine is a shame because women lead most startups. These are businesses that start out with very little capital. The challenge lies in enabling them to scale up. Local government units have to be guided in creating a more encouraging business environment, as women face more traditional restrictions that are harder to regulate, such as their reproductive role.

Ms. Luzviminda Villanueva, program manager of the Gender-Responsive Economic Actions for the Transformation of Women (GREAT Women) Project II, says the key aspects in creating a more inclusive business environment are in government policies, and in strengthening the decisionmaking capabilities of women.

Not everyone is into business, and not everyone in business knows what to do to succeed, said Villanueva. What civil society, the government, and the business sector can do is converge and align their policies and programs. ##

If you wish to know more about the studies presented at the forum, please click here

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TUGUEGARAO CITY--State think tank Philippine Institute for Development Studies (PIDS) stressed the need to improve the quality of policies and regulations in the Philippines to further boost economic growth and be able to compete with ASEAN neighbors in terms of attracting investments.

In a press conference in Tuguegarao City organized by the PIDS in partnership with the Philippine Information Agency, PIDS Senior Research Fellow Marife Ballesteros, highlighted the need to look at the existing regulations issued by the national and local government and assess whether these regulations are still effective and relevant.

"We need to improve the design and enforcement of our regulations. PIDS therefore is recommending to have all laws reviewed to determine whether they are properly designed, still relevant, and enforced properly."

She added that having policies and regulations that are unclear undermine business confidence and competitiveness, erodes public trust in government, and encourages corruption in public institutions and public processes.

The push to improve quality of regulations in the Philippines also stems from the fact that the country is a signatory to the ASEAN Economic Community (AEC), which is expected to take effect by the end of this year.

"Whether we like it or not, the current trend is toward globalization, open economy, and people-to-people connectivity. Thus, we have to improve the business and economic environment in order for the Philippines to be competitive with other ASEAN countries. Likewise, regulatory frameworks must be harmonized with that of other ASEAN member-states," Ballesteros said.

One of the pilot programs of the government aimed at improving business and economic environment is the Ease of Doing Business (EODB) reform, which is being implemented and monitored by an interagency task force chaired by the National Competitiveness Council (NCC). This project aims to help government agencies and local government units simplify the processes that businesses have to go through in its typical lifecycle.

This will be complemented by an upcoming project called Project Repeal that aims to revoke laws and regulations that increase the cost of doing business and hinder competitiveness. At present, the NCC is gathering information on what laws and regulations to repeal. Once these have been identified, the NCC will work with Congress in repealing such laws and regulations and establish a structure to oversee the process in 2016.

"But all of these reforms cannot be done without political will. Political will is needed to reduce the negative impacts of certain regulations on the business environment and on society as a whole," Ballesteros stressed.

As a starting point, PIDS is recommending the establishment of a formal regulatory management system (RMS) that will become a central oversight body to review regulatory institutions and policies, and determine which reforms are necessary.

"With the absence of a central regulatory management agency, ad hoc bodies composed of various government agencies involved in a particular sector are being created. However, these kind of setups are oftentimes not effective given that each agency has its own mandate." Ballesteros pointed out.

The National Economic Development Authority (NEDA) could take the lead in establishing a formal RMS. At present, NEDA is piloting a project looking at regulations affecting labor and employment as well as tourism sectors.

Tourism and labor employment have been selected as pilot areas because these are the sectors that are expected to be affected significantly by the ASEAN integration.

"ASEAN integration involves free movement of people. Thus, our policies must conform with the labor standards we committed under the AEC. Likewise, tourism standards and related regulations must be evaluated to make sure these are at par with those of other ASEAN countries," Ballesteros explained.

She suggested that local government units (LGUs), which issue permits and licenses for businesses related to tourism, should work hand in hand with the Department of Tourism and the Department of Trade and Industry (DTI) to assess the strengths as well as the weaknesses of regulations affecting the tourism industry and at the same time identify areas for improvement.

Ballesteros also emphasized the need for the private sector, civil society, academe, and the media to work hand in hand with the government in improving the quality of policies and regulations in the country.

Meanwhile, Tuguegarao City has started to simplify their business registration process in an effort to increase local investments and create more jobs. According to Roger Mandala of Tuguegarao City Business Licensing Office, simpler, faster, and cheaper business permit and licensing process encourages more businesses to locate in Tuguegarao, resulting in more jobs available and revenues for the city.

"Requirements for applying for a business permit has been reduced to include only a community tax certificate, barangay clearance certificate, certificate of business registration from DTI, and valid identification (ID) cards. Likewise, renewing tricycle franchises only requires the following documents: tricycle franchise from the previous year, vehicles certificate of registration, and official receipt (OR/CR) from the Land Transportation Office (LTO), barangay certification, and community tax certificate. Fees collected for permits and licenses has also been reduced. For example, the fee imposed for renewing tricycle franchise has been reduced from PHP 400 to PHP 200 while securing a mayors permit has been decreased to PHP 100 from PHP 200," Mandala explained.

When securing a license to operate a business in a particular area, one must first register a trade name with the DTI. Issuance of trade name usually takes 15 days, with applicants required to fill up a two-page application form. However, with the implementation of the EoDB program, DTI has been mandated to simplify procedures of registering a business name.

This was confirmed by Fe Baylon of DTI Region 2. According to Baylon, registration of a trade name now takes 15 minutes or less, with applicants required to fill up a one-page application form asking only for basic details about the owner and the business. Also, business name registration can be processed in any DTI office or online.

LTO Region 2 Spokesperson Manuel Baricaua, meanwhile, lamented the lack of quality regulations in the land transport sector. He noted that while land transport sector is a dynamic growing sector, it remains to be governed by the land transportation and traffic code crafted in 1964. He likewise pointed out some constraints that hinder LTO from implementing certain regulations.

"We have regulations to ensure road safety by having roadworthy vehicles and disciplined drivers on our roads. But do we have enough facilities to inspect all these vehicles? Do we have enough facilities for practical driving tests?" Baricaua asked.

He also pointed out that LTO could have been more efficient in addressing traffic problems if only the supreme court allowed the radio frequency identification (RFID) tagging system project to proceed. In 2010, the supreme court suspended RFID tagging of vehicles after some party-list groups asked the court to declare the RFID project illegal. RFID tagging is an ID system that uses small radio frequency identification devices for identification and tracking purposes.

"Using RFID technology, traffic enforcers would not need to apprehend or stop vehicles to check whether they are registered or not. With just the use of laser guns, they will be able to determine whether vehicles are registered and obtain other information tagged to the vehicle," Baricaua explained.

In conclusion, Ballesteros reiterated that problems such as those encountered by LTO could be prevented if there is an agency that monitors and evaluates government regulations and makes sure that these policies are still effective, relevant, and serve the common good.

The press conference in Tuguegarao City was one of the four press conferences organized by PIDS in partnership with the Philippine Information Agency in celebration of the 13th Development Policy Research Month (DPRM). Through these regional press conferences, PIDS hopes to further increase its reach at the local level and draw awareness in the provinces of the importance of policy research and this years DPRM theme, "Tamang Regulasyon para sa Patuloy na Pag-ahon".

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"There is a need to institutionalize good regulatory practice as we move to the ASEAN Economic Community."

Deputy Director-General Emmanuel Esguerra of the National Economic and Development Authority (NEDA) maintained that ensuring the quality of regulations through the building of a coherent regulatory system is crucial for the Philippines not only to keep up with its regional neighbors but also to build a sustainable and inclusive society--one where growth is felt at all levels.

In his keynote remarks at the Policy Dialogue on Effective Regulations for Sustainable Growth organized by state think tank Philippine Institute for Development Studies (PIDS) last September in Makati City to celebrate the 13th Development Policy Research Month (DPRM), Esguerra emphasized the need to review the countrys regulatory system to address barriers to trade and boost investments.

"Given that regulation is one of the three anchors along with tax and spending that governments draw on to achieve sustainable and inclusive growth, it is imperative for the Philippines to review its regulatory system, assess the environment for institutionalizing good regulatory practice, and formulate a regulatory framework to be able to pull alongside other ASEAN economies especially now that we are moving toward ASEAN integration," Esguerra stated.

He explained that this will help government in addressing behind-the-border issues that discourage foreign and domestic businesses to invest in the country.

Challenges to establishing an RMS

Meanwhile, PIDS President Gilberto Llanto highlighted the need for a strong and coherent regulation management system (RMS). According to Llanto, the country has the regulatory quality tools, the regulatory processes, the regulatory institutions, and the regulatory policies, which are the major elements of an RMS.

"What the country lacks is a central oversight body that will that will conduct regulatory impact assessment to determine the probable costs and benefits of proposed regulations. The absence of a formal RMS results in the lack of coherency of our regulations brought about by weak coordination across government agencies and regulatory bodies when it comes to creating regulatory policies. Implementing regulation also runs into trouble with usually weak institutions unable to carry out their regulatory mandate," Llanto noted.

Representatives from various regulatory bodies also shared their experiences as well as the innovations they introduced to come up with effective regulations. Speakers included Atty. Winston M. Ginez, chairperson of the Land Transportation Franchising and Regulatory Board, Mr. Efren Borci, administrator of the Maritime Industry Authority (MARINA), and Mr. Garry Domingo, head of the Quezon City Business Process and Licensing Office.

According to Atty. Ginez, LTFRB focuses on four regulatory issues" competition, innovation, productivity, and growth. To create better competition, the LTFRB has launched several regulatory reforms, which include requiring buses to strictly comply with its 15-year age limit for public utility vehicles and to install global positioning system (GPS) devices. The GPS device enables the LTFRB to determine whether the unit is following its authorized route and maintaining the prescribed speed limit.

A more popular regulatory innovation enforced by the LTFRB in the past year was the adoption of a regulatory framework for transportation network companies and transportation network vehicle services like Uber. According to Ginez, the Philippines is the first country to successfully develop a regulatory model for the sharing economy, which is expected to introduce more competition in the public utility vehicle sector.

In terms of regulatory principles, Ginez underscored the implementation of an open and transparent process, and agreed with Llanto on the need to conduct a regulatory impact assessment prior to the passing of a regulation. "Our goal is to simplify regulations, and to keep the public informed and engaged in the process through consultations and dialogues," he said.

Domingo of the Quezon City Business Permit and Licensing Office shared how they reduced the length of time to register businesses. The local government has streamlined regulations by putting up a business one-stop shop that integrates the registration processes of five government line agencies (Department of Trade and Industry, Bureau of Internal Revenue, Home Development Mutual Fund, Philippine Health Insurance Corporation, and Social Security System) into a single application system, cutting down the processing time from two weeks to 30 minutes. Future innovations include setting up of facilities for online and mobile money payments.

Meanwhile, Borci of MARINA gave an overview of the innovations in the four areas of the maritime industry, namely, overseas shipping, domestic shipping, development of maritime manpower, and ship building and ship repair.

Simplifying applications for ship operations, improving the use of nautical highways, allowing multiple-port calls for foreign ships, and granting domestic ships operational flexibility and permits that allow them to operate for the next three to five years were some of the innovations that MARINA introduced to streamline the regulatory process.

But Borci noted that regulatory issues remain. He emphasized the need to improve registration systems so that international ships can register in the country.

MARINA also focuses on the development and protection of seafarers given the increasing number of Filipinos who are engaged in this profession. According to Borci, 90 percent of the volume of international trade is carried at sea and a quarter of the manpower comes from the Philippines.

It is clear that regulatory reform is a continuous process. But as the anecdotes from each sector demonstrated, a centralized regulatory system, with strict conduct of regulatory tools like regulatory impact assessment across all sectors, would help ensure the quality of regulations, simplify the processes, and reduce the regulatory failures that inhibit sustainability and inclusiveness.

The dialogue, held last September 17, was the culmination of the 13th DPRM, an annual celebration aimed at promoting and drawing public awareness on the important role of policy research in nation-building. ###

If you'd like to know more about other events during the Development Policy Research Month, please visit the DPRM website for more details.