Europe-PH News

Michael Raeuber, President of the European Chamber of Commerce of the Philippines (ECCP) which is composed of six EU national chambers, said the direction on the recommendations under its 1st EU-Philippines Business Network (EPBN) Advocacy Papers is aimed towards achieving inclusive growth in the country and to provide a level playing field for the interest of EU businesses.

The 1st EPBN Advocacy Papers is a comprehensive book of 9 cross sectors and 13 sector specific industry-driven papers, focusing on legislative and operational changes which will increase the competitiveness of the Philippines and lead to win-win solutions which will drive sustainable and inclusive economic growth.

To help resolve the issue on foreign equity ownership on certain industries where foreigners are limited to a minority 40 percent share in favor of Filipinos with 60 percent, the EPBN has urged government to make a clear definition of what is a public utility and what is not. Public utility is one sector where foreign equity is limited to 40 percent stake.

“The simplest definition is all business where the public has a right of service like taxi, bus or airport are public utilities because people have right to demand service, anything business to business is generically not,” said Raeuber.

Henry Schumacher, ECCP vice-president for external affairs, stressed that MRT, rails and the running stock of MRT are not public utility just like airports and terminals. As indicated, there have been quite a number of EU businesses with interests in the public utility sector.

“Airport and terminal building is not a public utility but a structure for passengers to get to the plane and so that kind of interpretation would help in order to be very clear if whether the 60-40 comes in and where 60-40 is not coming in,” said Schumacher noting that the government and the private investors have less problem if they are going to distinguish what is public utility and what is not.

“The trains, running stock and rails are not public utility because everybody can have it, but selling tickets that’s where you engage with the public that is where the 60-40 comes in. We’ve been asking government to distinguish that, and distinguishing that would be a big step forward and that makes life easier,” he added.

To further open up the economy for foreign direct investments (FDIs), which only stood at $6.2 billion in 2014, the EPBN also recommended to revise the Foreign Investments Negative List to remove provisions including the practice of professions and foreign ownership restrictions on investment houses, lending firms, financing companies, among others. The Advocacy Papers also calls for the implementation of the House Speaker’s proposal to amend the Constitution’s restrictive economic provision.

Also, EU investors have proposed for the issuance of clear instruction on the application of the control test versus the grandfather test by the Supreme Court to determine the nationality of a corporation.

Raeuber, who is also chairman of the EPBN Steering Committee, also noted of other legislative reform bills they are supporting. The EPBN has prioritized the enactment of a national Fair Competition Law, Customs Modernization and Tariff Act, the adoption of the co-loading bill and the removal of professions from the Negative List.

Similarly, the EPBN has called for the establishment of a Department of ICT, liberalizing and modernizing of the national procurement framework, and maintaining investor friendly incentives schemes to attract quality investment and trade partners.

Trade and Industry Secretary Gregory L. Domingo, who received the Advocacy Papers together with Socio-Economic Planning Secretary Arsenio Balisacan, cited the EPBN for its thoroughly “thought out” recommendations, but Domingo also stressed they can only push for issues they have agreed on given the limited period of the Aquino administration.

Source: Manila Bulletin