September 24, 2021
We, the Foundation for Economic Freedom, express our strong support for the initiatives to open up the Philippine economy as a means for economic recovery and sustainability. Liberalizing more sectors of the economy will make the country more competitive in attracting foreign investment and enable it to take advantage of global opportunities.
One opportunity that the Philippines should not miss is membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is expected to be one of the largest free trade blocs in the world. Currently, the CPTTP has 11 Pacific Rim nation-members including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Several countries have also shown interest to join the trading bloc including the United Kingdom, China and Taiwan all of which have recently formally applied to become members. It is also expected that the United States, which organized the Trans-Pacific Partnership under former President Obama but withdrew under former President Trump, will seek to rejoin the trading bloc in 2022.
Being a member of the CPTTP is a path towards economic recovery. It will greatly benefit our manufacturing sector, particularly the export sector, and open doors for our MSMEs. It will allow our business sector to participate in global production networks and maximize trade opportunities.
Hence, we support the initiative of our economic managers to further open up other sectors of the economy and not discriminate against foreign investors, which is a pre-condition to membership in the CPTTP. We laud Congress for the progress made in legislating bills that seek to make our economy less restrictive to foreign investments such as the Amendments to the Retail Trade Liberalization Act, the Foreign Investment Act and the Public Service Act. All three bills were certified as urgent by the President for purposes of facilitating economic recovery.
Of the three bills, the amendments to the Public Service Act is the only remaining bill that has not been passed by the Senate. The House of Representatives has passed all three bills. The amendments to the Public Service Act is being derailed by the insistence of some senators to keep certain public services closed to greater foreign investments like the telecommunications and transportation industry. This move will maintain the status quo and thwart the intention of the bill to liberalize the economy. It will also inhibit our ability to meet the requirements to join the CPTTP, whose intention is to remove the barriers to free trade among its members.
We need to keep in mind that liberalizing the telecommunications and transportation sectors in the amended Public Service Act will be critical in the Philippines’ application for membership. If the country fails to join the CPTTP, foreign investors will not come to the Philippines as they won’t get preferential access to the markets of this trading bloc.
Hence, we urge our Senators to consider the ability of the country to fully participate in the global economy. Delaying the necessary reforms to facilitate our membership in the CPTTP could result in further wasted opportunities and the see us once again lagging our neighbors in our quest for economic recovery and sustainability.
For the sake of our economy and the well-being of our people, we urge our lawmakers to act with the urgency that our situation demands and enact these crucial reforms posthaste.
###