Today is: Thu, May 23, 2013
The Philippines faces broad challenges to achieving domestically-generated and sustainable economic growth. Despite moderate GDP growth in recent years, domestic investment has been stagnant in real terms and the Philippines has, over the long term, been unable to attract significant shares of foreign investment that have been available globally. Present levels of investment are inadequate for the Philippines to achieve the kind of robust, long-term growth needed to create jobs and reduce poverty.
Fortunately the reasons why the Philippines has remained a relatively unattractive destination for investment (among both Filipinos and foreign investors, alike) are well-established, and repeated in various competitiveness diagnostic surveys released each year. Despite variations in the methodologies of each diagnostic, these surveys consistently show that the Philippines is failing to address key issues that adversely affect the competitiveness of the country, i.e. its ability to create business climate conditions conducive to fostering investment (both domestic and foreign), and that the Philippines as a nation is falling behind other countries in relative terms.
Reform efforts should focus on removing barriers to business, investment, and trade, addressing inappropriate or poorly-enforced business regulations, and attaining long-term fiscal stability and strengthen the economy’s resilience against domestic and external shocks. Fiscal sustainability and the government's ability (including a local government’s ability) to finance poverty-reducing programs continue to be at risk from poor rates of revenue collection (tax effort) and revenue leakage. The key challenge, then, is the Philippines needs to address competitiveness and governance issues that have perpetuated significant barriers to business, investment, and trade. Many of these reforms have long been identified but require persistence, creativity, and mostly strong political will to implement policy decisions at the local level. Investment is also hampered scared because local governments and regional offices of National Government agencies have shown weak and inconsistent implementation of nationally-established rules and procedures.
LINC-EG will promote local and national economic competitiveness to improve prospects for economic growth and fiscal sustainability. LINC-EG will support a range of activities that: (1) improve local and national government economic governance and revenue collection; (2) improve local field office effectiveness of national government agencies; and (3) improve operations, policy, and program implementation linkages between local government offices, local field offices of national government agencies, and national government agencies. LINC-EG will work to improve the business environment, remove barriers to public and private investment, and reduce cost and policy constraints to trade.
The LINC-EG Program will focus a large portion of its resources on implementation at the regional, or sub-national, level by working with local government units and the local field offices of national government agencies in relatively stable and economically-prominent areas of Mindanao. Participating regions will include clusters of local governments and other public and private sector partners and local field offices of national government agencies.
LINC-EG activities will be able to address will be seven Program Areas applied either regionally or nationally, as appropriate.
- Program Area #1: Perform competitiveness diagnostics in order to have a better understanding of the local and national competitiveness factors that affect the investment climate.
- Program Area #2: Update and revise the 1992 "Barriers to Entry" study, focusing on concentration ratios, regulatory reform, red tape burden, other barriers to investment. This may include exploring the development of a competition or anti-trust framework.
- Program Area #3: Streamline the business permit and license process, reducing the time and cost required to start, operate, and close a business that would lead to simplified forms and procedures, decreases in the number of signatories, and decreased overall time required for processing or for final approval.
- Program Area #4: Improve property rights and land use; focusing on secure registration and transfer of title, appraisal, taxation, and adjudication. This will include assistance to the Land Registration Authority (LRA) and local Registry of Deeds to improve the legal and administrative framework on land titling.
- Program Area #5: Improve tax collection efficiency and reduce tax leakages by assisting the BIR and its Revenue District Offices in streamlining tax registration and filing procedures, and simplifying payment procedures. This may also include synchronizing tax mapping of BIR-RDO with local government unit.
- Program Area #6: Improve trade facilitation and customs administration and reduce the cost of importing and exporting by assisting local ports, offices of the Bureau of Customs, and relevant Port Authorities to improve customs administration, reduce smuggling and other illegal behavior, and increase revenue collection. This may also include assistance to Philippine compliance with the Revised Kyoto Convention (RKC) on Customs Administration and implementation of the National Single Window (NSW) between the Bureau of Customs and other government agencies.
- Program Area #7: Improved availability of infrastructure (transportation, power, aviation, ports) through efficient implementation of high priority infrastructure projects and improvement of the legal and policy framework for private sector participation in infrastructure (e.g. BOTs). This may also include continued energy sector reform leading to more reliable power at lower cost to the consumer and reform of civil aviation (both passengers and cargo).
Contractor: DAI/Nathan Group
Unit 1104 139 Corporate Center
139 Valero Street, Salcedo Village
Makati City, Metro Manila Tel: 750-0163; Fax: 750-0481
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