Philippines seen benefiting the most from liberalization efforts

The Philippines is seen benefiting the most, especially in terms of improvements in business environment, from liberalization efforts toward building the Asean Economic Community, according to UBS Securities.

In a 36-page study on Southeast Asia, the financial services provider said this was so considering that the country had seen the least improvement in the ease of doing business in the past seven years.

“Within the Asean [Association of Southeast Asian Nations], improvements have been recorded across the board,” UBS said. “Indonesia, Malaysia and Laos have recorded the greatest and broadest improvement in their respective business environments, while the Philippines and Singapore have seen the least.”

Because of that, UBS said the Philippines appeared to have the best momentum toward the liberalization of its economy. The already liberal Singapore comes second.

In its assessment, UBS describes the ease of doing business in the Philippines as “moderate but improving.”

As for cross-border trade and financial services, UBS said these were not as open as in Singapore but added that there was ongoing liberalization particularly as the 10-nation Asean pushed ahead in establishing a single economy.

UBS, however, warned about “the significant influence” that the elections in 2013 might have the momentum for reforms.

“Based on political conditions and past momentum, we believe the liberalization dynamics are strengthening in (the) Philippines, at least for this year,” UBS said.

While liberalization in the Philippines has been strengthening, relevant laws must be passed this year before all political attention turns to the Congressional elections, it said.

In particular, UBS mentioned the need for a fiscal incentives law that would simplify rules on taxes and incentives, and another on mining to make investing in this sector easier.

Also, the company noted the need for the liberalization of government procurement related to infrastructure to help the PPP [public-private partnership] process.

“While we cannot point to uniformly improving liberalization conditions in any economy, the Philippines does stand out,” UBS said.