FOREIGN BUSINESS chambers in the country yesterday set the tone for engagement with the over one-year-old government of President Rodrigo R. Duterte, unveiling reform proposals under their continuing “Arangkada Philippines” initiative that was launched in 2010 at the beginning of the previous administration.
In their Sept. 14 annual report, titled: “Implementing the 10-point agenda” — referring to guideposts the current government has adopted in order to spur overall economic growth faster and reduce the ranks of the poor when it ends its term in mid-2022 — the seven members of the Joint Foreign Chambers of the Philippines (JFC) said this year’s recommendations were drawn from unfinished reforms in past “Arangkada” (accelerate) lists, the government’s own blueprint as especially contained in the 2017-2022 Philippine Development Plan, as well as inputs from the Philippine Chamber of Commerce and Industry, The European Chamber of Commerce of the Philippines “and other sources.”
The JFC said its “extensive menu of policy suggestions” is designed to ensure that “the Philippines will be rated in future years much closer to the other ASEAN-6 economies that it currently lags behind,” referring to bigger economies of the Association of Southeast Asian Nations.
The reforms are grouped under the topics: continuing the macroeconomic agenda; increase competition and the ease of doing business; infrastructure building; rural development; human capital development and reproductive health; science, technology, and arts; and poverty alleviation and social protection program.
Recommendations include various tax reforms, pushing the government “to double” gross domestic product (GDP) growth rate to nine percent (compared to 7-8% officially targeted up to 2022), “supported by a clear long-term industry policy”; growing merchandise exports by 15% a year (compared to 5-9% annually under official targets until 2022); strengthening delivery of microfinance and micro-insurance products and services; improving transparency and the regulatory environment; opening up further telecommunications, retail and public utilities; an aspiration for foreign direct investments to exceed $10 billion partly by making the Foreign Investment Negative List “more positive” by reducing restrictions; creation of independent regulators for railways, airports and seaports; improving the public-private partnership framework “to free up fiscal space,” speeding up power projects and drafting a renewable energy road map; mass transit systems for Cebu and Davao cities; reviewing the average effective tax rate for large-scale mining to make sure it is not more than what is imposed across Asia and the Pacific; increasing the public education budget to four percent of GDP; further revising curricula to narrow the skills-jobs mismatch; allowing foreign schools to operate and foreigners to teach in the Philippines; as well as reducing fertility rate to 2.1% in 2022 from 3.1% in 2015.
“I think at this stage, there is progress being made,” American Chamber of Commerce Senior Advisor John D. Forbes said in a press conference yesterday at the sidelines of the “Arangkada” report launch in Manila Marriott Hotel in Pasay City.
“But the question is: is it going to continue and increase the pace?”
The government should prioritize the development of the remaining spaces at the Ninoy Aquino International Airport into an annex terminal while it is still weighing the two proposals to build new airports either in Sangley Point or Bulacan.
Roberto C.O. Lim, former transportation undersecretary for airports and aviation, said during the panel discussion at The Arangkada Philippines Forum 2017 at Marriott Grand Ballroom that there has been a proposal to develop the green path in NAIA and at the former Nayong Filipino.
“There has been a proposal to develop these open spaces into an annex terminal and we need a clarity on how to develop these open spaces. Government should prioritize negotiation for this proposal because we need space aside from the runway,” said Lim.
Lim noted that NAIA’s 31 million passenger capacity has been surpassed with 39 million traffic in 2016. To address this congestion, the government has expanded the taxiway to be operational next year. They have also installed a brand new CMF ATF to be fully operational next year with personnel still undergoing training.
These measures are expected to come up with efficient use of airspace to accommodate more activities or commercial flights and improve the productivity of NAIA.
It could be recalled that flag carrier Philippine Airlines, which exclusively operates Terminal 2 at NAIA, has proposed a 20-year lease deal for the 16-hectare property of the Philippine Amusement and Gaming Corp. that it wants to develop as Terminal 2 Annex building. This property was the site of Philippine Village Hotel and the former Nayong Pilipino complex.
These project is expected to compete the two proposals to build airport terminals in Sangley Point by the Tieng and Sy Group and Bulacan by tycoon Ramon S. Ang.
PAL plans to build an annex terminal that could accommodate an additional 12 million to 15 million passengers per year. It would have airbridges capable of serving 12 to 17 wide-bodied and single aisle jets. The flag carrier requires additional space for its growing fleet. It is targeting a total of 96 planes by 2021 from the current 87 aircraft.
Lim said the government can prioritize this proposal while it is still weighing the proposal to push general aviation operation outside of Manila is one strategy with two unsolicited proposals already pending: Sangley Point and Bulacan.
For Sangley Point, Lim said should the 2.7 kilometer runway, which is now delayed, can be refurbished to serve possibly service domestic flights and international flights after but stressed that that is more important now to connect the island first to the mainland. “But the challenge is the new manila international airport and government has to come up with decision sooner than later because it is a 10-year development program,” he said.
The Joint Foreign Chambers of Commerce of the Philippines (JFC) will be having their Sixth Anniversary Arangkada Philippines Forum this year with the theme “Implementing the 10-Point Agenda.”
The 2017 forum will emphasize the 10-point Socioeconomic Agenda of the Duterte Administration. With a combination of public and private sector speeches and panelists, the forum will discuss key programs and policies that support achievement of the ten points in the years ahead. Such reforms will be discussed within the framework of Arangkada’s Seven Big Winner Sectors (Agribusiness, BPM, Creative Industries, Infrastructure, Manufacturing and Logistics, Mining, and Tourism).
The Arangkada Philippines Project is the major advocacy—launched in 2010—of the JFC to increase investment and employment in the Philippines. In 2010, the JFC published the Arangkada Philippines 2010: A Business Perspective, an advocacy paper reflecting inputs from focus group discussions of top business leaders on seven sectors with high growth potential: agribusiness, BPM, creative industries, infrastructure, manufacturing and logistics, mining, and tourism, with 471 recommendations to build a more competitive Philippine economy, leading to high growth and new jobs.
The JFC has published five annual assessments of these recommendations, six policy briefs, and seven policy notes, all intended to improve the investment climate. Their advocacy efforts have contributed significantly to recent strong economic growth and the large increase in foreign direct investment, which reached US$ 7.9 billion in 2017, approaching levels of some competing ASEAN economies. These publications are available at the Arangkada website www.arangkadaphilippines.com.
The Sixth Anniversary Arangkada Philippines Forum 2017 will be held on September 14, 2017 at the Marriot Grand Ballroom, Manila. Registration for the forum is now ongoing.