Gov’t urged to name ‘Asean czar’

The appointment of an “Asean czar” may be crucial in boosting the competitiveness of Philippine industries, which may further lag behind their peers in the region due to domestic regulatory, financing, power and infrastructure bottlenecks.

Sergio R. Ortiz-Luis Jr., president of the Philippine Exporters Confederation Inc. (Philexport) and honorary chair of the Philippine Chamber of Commerce and Industry (PCCI), said there were huge opportunities that could be tapped from the establishment of the Asean Economic Community.

However, Ortiz-Luis said, there was a need to have an authority who should align and harmonize all the efforts and measures being undertaken to boost the country’s competitiveness in the region.

The problem, Ortiz-Luis stressed, was that some groups and agencies were doing their own thing without coordinating with everyone else, as far as AEC efforts are concerned. This, he added, would have significant impact on small-and-medium enterprises.

Although there are no other huge surprises expected with the establishment of the AEC, as 99 percent of the tariffs had already been reduced to zero, the concern was mainly on whether Philippine enterprises could compete in an integrated regional economy. As it is, some local products are already losing to imported goods, whose prices are much lower compared to those produced locally.

Among the most affected sectors are retail, manufacturing and agriculture, as other countries in the region are able to produce at much lower rates compared to the Philippines.

“Our No. 1 problem is financing for SMEs (small and medium sized enterprises), high labor costs and high power rates. Where do you see our competitive advantage? We’ve always been proud that we are English-speaking people and that we are talented. But in terms of English literacy, Thailand has already caught up with us. Right now, I do not see where we can excel unless we can be competitive in our (production) inputs,” Ortiz-Luis explained.

“Add to that are the new policies being implemented but which are detrimental to businesses,” he added.

The availability of financing remained one of the biggest hurdles for SMEs, according to Ortiz-Luis. Their situation is further compounded by the faulty implementing rules and regulations (IRR) of Republic Act 9501 or the Magna Carta for MSMEs, which does not seem to be working well as financing has not flowed into the sector over the years.

“We need to replace the IRR so that the law can work (for the benefit of MSMEs). Right now, it’s not working. Our neighbors in the Asean have solved their problems in financing the SMEs, but here, we are still in the discussion stage,” he said.

In terms of financing, we’re not ready in the Philippines.”

Other challenges included the cumbersome and, at times, unclear procedures involved in registration, accreditation and certification for businesses; the port congestion that continues to pose difficulties for those involved in the import and export of goods, and the conflicting new policies and regulations imposed by the government.