THE PHILIPPINES must pursue its priority legislation with the goal of improving the overall investment environment while addressing broader problems like persistent inflation and plateauing growth, economists said.
Improving conditions for investment must make the risk faced by project proponents more predictable, they said.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the bills singled out as priorities last week by Special Assistant to the President Frederick D. Go will help attract more foreign direct investment, particularly to infrastructure projects.
“The objective is to make doing business easier and more convenient for both local and foreign investors and to make their returns and risks more predictable,” Mr. Ricafort said.
He added that incentives should be more predictable, palatable, and conducive to foreign investors to help them better manage their costs, returns, and earnings expectations.
“This is in line with global best practices to become more competitive with alternative investment destinations in ASEAN,” he said.
Frederick D. Go, the Special Assistant to the President in charge of investment and economic affairs, who holds Cabinet rank, said late Thursday that the bills he plans to work on with Congress once it resumes session on July 22 include amendments to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
He added that he also considers as priorities a bill that addresses right-of-way issues that have tended to delay infrastructure projects, and one that will create a Department of Water.
Leonardo A. Lanzona, an economics professor at the Ateneo de Manila, said the three bills being pushed to attract foreign investment by the Office of the Special Assistant to the President for Investment and Economic Affairs, while necessary, do not move the needle much from the status quo.
“What is needed are far more urgent and comprehensive plans that address inflation and anemic growth,” Mr. Lanzona said in an e-mail.
“While Mr. Go’s three priority bills are necessary, these have to be formulated and implemented within the context of a more comprehensive industrial policy. Piecemeal programs are not sufficient to attract investment,” he added.
Citing the case of agriculture, he said that the solution need not deal with the problem directly but rather create a “dynamic environment that leads to structural transformation.”
According to Mr. Go, the bill on right of way will help accelerate infrastructure projects like roads, transportation, energy, or water projects.
“For infrastructure, we need a very good law on right of way. A lot of our infrastructure projects need a very efficient way of securing the right of way to speed them up,” he said.
He said that the bill that will create the Department of Water will provide a “more well-orchestrated program to ensure sustainable water and efficient delivery of water service,” which will help keep water costs low.
“We have several bills that affect the economy, and we certainly would like to work very closely with Congress… to get these bills done as soon as possible,” he added. — Justine Irish D. Tabile
