After numerous attempts over more than a decade, the Philippine government finally enacted a comprehensive competition law, the Philippine Competition Act (Republic Act 10667) in July 2015. Before this breakthrough legislation, competition policy and law was scattered in about 30 different laws (for instance, the Philippine Constitution, Revised Penal Code, Consumer and Price Acts, and sector-specific regulations), with outdated provisions and hardly any jurisprudence. The passing of the law is only the first step. Much needs to be done to establish a truly working competition policy, including capacity building, and dissemination, information and education for the law. This paper attempts to contribute in this regard, by examining the provisions of the new law, and providing an overview of what it covers, what it can do, and what could be the possible implications for related policies. As such, this paper has three major sections. The first provides an overview of the rationale and objectives of competition law. The second discusses the major provisions of the new law, including some comments to highlight important provisions. The third provides an overall assessment of the Act and additional comments and observations. The section also looks briefly at the case of PLDT/Globe acquisition of the San Miguel Corporation's telecommunications assets.
Capacity building is crucial and necessary in cooperation and integration efforts between two or among several country partners. In the negotiation process, the countries need to build a strong confidence shared among partners that what is being established will be generally fair, equitable, and beneficial to all concerned. Although forging trade agreements is not a simple zero-sum game, mutual benefits must still be evident to all parties and, hopefully, deemed to be enhanced to the satisfaction of all those involved. This requires capacity building at many levels – from the level of negotiators, to institutions and government bureaucracy, to the private sector that will eventually reap the benefits and/or deal with adjustments. However, this endeavor is easier said than done. At the very least, country partners should ensure the existence of a degree of transparency, a shared set of objectives, and a common effort to truly learn from and understand the perspectives of each other.
ASEAN has been working towards the free movement of goods in the region. Although significant progress has been made in the opening up of markets through tariff elimination, addressing the issues of non-tariff measures (NTMs) remain. With the reduction in tariffs across the globe, increasing attention has thus shifted to the effects of these NTMs that become simply non-tariff barriers (NTBs) to trade. Non-Tariff Measures (NTMs) could be justified for different reasons such as health, security, environment, and consumer protection. However, they could adversely affect the global and regional production chains by unnecessarily increasing the cost of doing business. This paper reviews existing studies in Non-Tariff Measures for better understanding of NTM implications to international trade as well as local business and to propose some ways forward. For additional insights, it presents the results of the small sample survey (perception) among exporters on the types of NTMs encountered within and outside ASEAN and the perceived operating cost impact of NTMs. The survey identifies three main NTBs affecting operations of their businesses either within or outside ASEAN- these are (i) Custom Formalities (ii) Rules of Origin (iii) Technical Barriers to Trade. These are consistent with the findings of an International Trade Center (ITC) Business Survey on NTMs in the Philippines 2015-2016. Some of the policy recommendations of the paper are creating a comprehensive and updated database of NTMs, intensive reforms to streamline NTM procedures, improvements in testing laboratories and facilities, accreditation and certification process and capacity building on what and how to comply with applicable SPS and TBTs.
The Philippine economy has been posting outstanding growth and gaining momentum in recent years. Having consistently high GDP growth rate at 6-7% in the past years, the Philippines is among the fastest growing economies in Asia. This is a big turnaround from its dismal performance in past decades of boom-and-bust cycle which has left the country behind, vastly outperformed by its Asian neighbors. From being the so-called "sick man of Asia," the country has become a consistent major performer in the region. The prospects for the economy remains very optimistic as the country garnered positive investment, credit and competitiveness ratings and growth projections from investment grade and credit rating agencies – Moody's, Fitch, and Standard and Poor (PDP 2017-2022). More recently, the Philippines received another upgrade from Fitch, placing it ahead of Indonesia, in anticipation of a strengthened fiscal outlook with the passing of the tax reform package. In the World Economic Forum's Global Competitiveness Report 2017, the Philippines ranked 56th out of 137 economies and performed well in several areas including macroeconomic environment, inflation management (no.1), government debt and budget balance-both as percentage of GDP, soundness of banks, regulation of securities exchanges, primary and higher education, among others. International organizations such as the Asian Development Bank, International Monetary Fund and World Bank have projected that the Philippine economy will experience continued robust growth in 2017-2019.4 In sustaining the strong economy and realizing the growth projections, continued sound performance of growth drivers and government policies to support them are crucial.
SME development as a major domestic policy objective that is consistent and reinforced within APEC would not only engender inclusive growth, but also enable SMEs to become drivers of growth for the domestic, as well as the regional economy. This paper provides some background about the setting, locally in SME development policy and regionally in APEC SME activities, and offers recommendations for APEC cooperation for mainstreaming SMEs in the regional and global market.
Competition Policy in East Asia clarifies the key issues and provides a framework for understanding competition policy, looking in-depth at a number of regulated sectors for additional perspectives. Until two or three decades ago, competition and consumer protection policies were the preserve of the major developed economies like the United States, the United Kingdom and some European countries. Now competition issues are at the top of the international agenda as globalization spreads and as the operations of the World Trade Organization, the World Bank, the Asia Pacific Econom.
After numerous attempts over more than a decade, the Philippine government finally enacted a comprehensive competition law, the Philippine Competition Act (Republic Act 10667) in July 2015. Before this breakthrough legislation, competition policy and law was scattered in about 30 different laws (for instance, the Philippine Constitution, Revised Penal Code, Consumer and Price Acts, and sector-specific regulations), with outdated provisions and hardly any jurisprudence. The passing of the law is only the first step. Much needs to be done to establish a truly working competition policy, including capacity building, and dissemination, information, and education for the law. This paper attempts to contribute in this regard by examining the provisions of the new law and providing an overview of what it covers, what it can do, and what could be the possible implications for related policies. As such, this paper has three major sections. The first provides an overview of the rationale and objectives of competition law. The second discusses the major provisions of the new law, including some comments to highlight important provisions. The third section provides an overall assessment of the act and additional comments and observations. The section also briefly looks at the case of PLDT/Globe acquisition of the San Miguel Corporation's telecommunications assets.
This paper is part of the Philippine study for the ERIA project on the Mid-Term Review (MTR) of the ASEAN Economic Community (AEC) Blueprint. A milestone in ASEAN economic cooperation is the Cebu Declaration on the Acceleration of the Establishment of an ASEAN Community by 2015 during the 12th ASEAN summit in 2007, and subsequently the passing of the ASEAN Charter. A midterm review of where the member countries are in moving toward the AEC is thus timely. At the core of ASEAN integration is free flow of trade in goods. An essential part of the midterm review is an assessment of progress in the area of trade liberalization and facilitation. Toward this end two sets of surveys are undertaken by the study: (1) an MTR Questionnaire for Government Officials, and (2) Firm MTR Survey on Import/Export and Customs Clearance. The questionnaire for government officials aims to gather information on aspects of ASEAN customs development and integration and the implementation of the National Single Window (NSW) and ASEAN Single Window. The survey of firms will provide the view from users by getting their experience on customs clearance and permit release process in other government agencies. Recommendations of the ways forward are then suggested.
This short paper attempts to lay down the framework and basic principles for the optimum interface between competition policy and infrastructure regulation. Competition policy should address exclusionary and exploitative acts and discipline firms when such acts are committed. In certain cases, more may be required by way of additional competition rules needed to assist the market and substitute for lack of a competitive process of allocation. This is where competition policy in the form of direct regulation comes in. This is usually where market power is inherent (in the structure), specifically the case of infrastructure sectors. The basic issues relate to: tendency for "overregulation," problems with price regulation, privatization, unbundling, regulatory capture, and multiple objectives. The paper also highlights the findings from past studies on three major infrastructure/utilities sectors, namely power, shipping and telecommunications. For all these sectors, there have been significant attempts to enhance competition, mainly in terms of relaxing entry regulation and some effort at deregulating prices and privatization. It was not surprising to find difficulties in dealing with the trade-offs between social objectives, principally equity and access, and competition (efficiency) objectives.
Although justification for competition policies is well founded in the economic literature, there is a need to understand their implications more fully, brought about not just by what is happening in the global arena but even more importantly by various comprehensive policy reforms that have been implemented in recent years. And while there may be a general consensus that "competition is good," there is vagueness in the minds of many and uncertainty about the need for competition policy and how competition should be enforced. This paper aims to contribute to the growing discussion on how to proceed from here. Towards this end, the paper first outlines the framework for competition policy in the Philippine setting. It then attempts to assess the state of competition in the Philippines. What has the Philippines done along the framework of competition policy and what has been the impact on the state of competition in the different sectors of the Philippine economy? A general assessment is made across the different sectors of the economy by looking at what major factors are present that could determine the state of competition in the different sectors. It also looks at policy reforms that have been implemented to improve the state of competition in these sectors. Finally, in conclusion, the paper addresses the issues that confront competition policy and suggests possible approaches towards formulating and implementing a workable competition policy for the Philippines.
The paper attempts to provide a theoretical analysis as well as some indicators on the linkage between trade policy and the environment. It looks at what has happened to the share of manufacturing industries by pollution classification over time and finds that the share of non-pollutive/nonhazardous industries have grown over the years covering the period of trade reforms. The impact of trade policy on the environment was also analyzed using a simulation model which predicts what happens to pollution intensity with and without trade reforms. The results indicate some positive impact of trade reforms on the environment and the findings suggest that the Philippines should pursue its current thrust towards greater trade liberalization and implement the corresponding environmental measures.
The paper looks into the major factors which affect the efficiency of product market. In particular, the paper examines the policy environment, which could induce better resource allocation, foster dynamic efficiency and thereby increase the productivity of the industrial sector. This policy environment comprises three layers: 1) the trade policy that determines the general terms of trade; 2) other government policy measures and regulations that will hinder a well-functioning market; and 3) measures and regulations intended to govern the conduct of firms. Gaps and issues with respect to these three layers of policy environment are also discussed in the paper. Much has already been done with respect to the first layer of policy environment. Trade reforms beginning in the 1980s have been substantial and contributed positively to improving the competitiveness of the manufacturing sector. The more open trade regime made possible by trade reforms has led to increased market contestability. However, in many cases, the mere threat of import competition is sufficient to keep monopolistic tendencies in check. Perhaps, the main concern in this area is to safeguard the reforms that have already been implemented and prevent policy reversals. Another area for improvement is related to improvements in institutions that would enable the Philippines to take full advantage of the opportunities in the larger world market offered by the more open trade regime. In particular, the government should continue to pursue administrative measures that will lower the costs of importing and exporting. While competition issues regarding the conduct of firms are important, the more crucial and urgent concern is the second layer of the policy environment--- the government policies with anti-competition effects. As pointed out earlier, a lot has already been done in terms of implementing reforms as regards to trade policy (first layer), and perhaps, it is timely to shift some of the focus on the other government policy-induced anti-competitive elements. There is a clear need to re-evaluate policies and review whether such policies and regulations could pass a "competition" test or, if not, if they could be justified on public welfare grounds. With respect to the third layer of policy environment, many studies point out a need for a more effective anti-trust legislation for the Philippines. These include most notably the studies by Patalinghud (1998), Cabalu et al (1999), an earlier study by Lamberte et al (1992) on barriers to entry, and an ongoing study by Anthony Abad (not to mention studies done under the auspices of CRC and AIM). All point to the weakness of the existing legislation and mechanisms for implementation. In developing economies, implementation is the Achilles' heel of competition law. Thus, in designing a competition law, careful attention must be focused on its implementation concerns. Successful implementation requires not only the careful design of substantive prohibitions and the construction of an effective competition body, but would also entail improvements in other institutions such as the judicial system. Sadly, the institutional ingredients that make ambitious competition system feasible in developed countries rarely exist in developing settings and which will take long years decades) to build. In the long run, the government should work towards creating an implementing body or commission. Ideally, this commission will be responsible not only for the prevention of anti-competitive behaviour of firms or simply anti-trust legislation, but also for the broader area of competition policy and law.
Studies find increasing frequency, intensity, and impacts of natural disasters, especially as they interplay with the negative effects of climate change, environmental degradation, and rapid urbanization. The financial implications could be massive, especially in terms of damages on private assets, public infrastructure, and on the productive agents of the economy. Various estimates show that the magnitude of damages and losses on economies could hover around a fraction of one percent to a tenth of GDP, depending on the degree of exposure.It is quite common that individual governments bear most of the cost of disasters, especially in emerging economies where the private sector and the capital markets are not fully developed. The available resources within governments are mostly insufficient to address the cost of response, rehabilitation, and reconstruction, which could result in adverse impacts on the overall fiscal and macroeconomic condition of the particular economy. On top of that, the burden on the society, particularly the poor, is prolonged by the inability to deliver services due to the financial constraints resulting from a disaster.As such, there is a need to improve the current system of financing the cost of disasters in a manner that would enhance the roles of the domestic private sector and international financial market. In addition, in this age of globalization and close interconnectedness, disasters tend to carry risks that cross borders, calling for a greater and more concerted global/regional effort. The paper proposes to expand the prevailing regional cooperation within APEC toward improving access to finance for disaster recovery and reconstruction and taking a more proactive approach to risk financing. Regional cooperation is seen as a mechanism to promote the development of financial systems and products to effectively reduce the fiscal burden arising from disasters, as can be gleaned by looking at the experiences of other economies in this regard.
The Asia and Pacific region and Latin American and Caribbean region are two regions divided not only by vast geographic distance, but also by disparities in economics, politics, culture, and history. Most recently, a number of forums explored the possibility of closing such gaps and linking the two regions through various trade and investment initiatives. The opportunities for cooperation abound and could touch on areas that will improve the regional value chain and enhance the innovation and competitiveness of both regions. Interregional cooperation could also help the two regions seek ways to deal with the current global economic crisis through a range of opportunities to stimulate the economy. This paper explores the potential for regional cooperation between the Asia and Pacific region and Latin America and the Caribbean. It also provides some recommendations to enhance the economic partnership of the two regions.
