Call for more reforms issued at WTO review

WORLD TRADE Organization (WTO) member economies last week called on the Philippines to create a more level and open business environment for foreign players.

The country was commended for its “positive economic performance” in the last few years during the March 20 and 22 Philippine Trade Policy Review (TPR) in Geneva, but was also prodded over the pace of reforms.

The WTO members’ recommendations zeroed in on the areas of incentives, sanitary and phytosanitary measures (SPS) and technical barriers to trade (TBT), competition, government procurement and services trade.

To improve efficiency in tax collection, Manila was asked to fast-track efforts to unify fiscal incentives policies as the government works on a balance between attracting investments and easing pressure on the deficit.

The proposed Rationalization of Fiscal Incentives Bill, already passed on third reading by the House of Representatives, remains at the committee level at the Senate.

With regard to SPS and TBT matters, “[m]embers requested the Philippines to further increase transparency and base its … measures on international standards with a view to avoid imposing unnecessarily burdensome requirements,” read the TPR chairperson’s concluding remarks that were released on Friday.

Related to sanitary measures is the local Agriculture department’s recent row with importers over an administrative order (AO), which allegedly set unscientific standards, on frozen meat trade. A new AO was issued this month.

The WTO members, meanwhile, lauded the Justice department’s move to set itself as the country’ competition authority even as they questioned initiatives to pass a general competition law.

A draft Competition Bill is currently pending second reading at both the House and the Senate.

The WTO members also questioned the Philippine government’s procurement policies, said to exhibit a “strong preference for domestic goods and services.”

“The Philippines was asked to consider using its public procurement framework to develop the infrastructure in a cost-effective manner. Some members also encouraged the Philippines to join the Government Procurement Agreement,” the remarks read.

Asked whether Malacañang was considering joining the agreement, Presidential Spokesperson Edwin M. Lacierda yesterday said in a text message: “According to [Budget Secretary Florencio B. Abad], that was the case before. But there is a process of harmonizing country and international procurement systems that has been going on for some time.”

“The objective is to eventually adopt just one system,” he added.

The Philippines was also urged to further liberalize trade in services in a bid to make the domestic sector more efficient and competitive and reduce costs “related to banking, telecommunications, and transport.”

Liberalizing construction services, for example, can help address “infrastructural weaknesses,” allowing the country to tap its potential in tourism.

The WTO periodically conducts TRPs on each member country to determine the progress of economic liberalization. Last week’s session marked the Philippines’ fourth review, with the previous held in 2005. –ELIZA J. DIAZ, Reporter, Businessworld