Strong competition policy to promote more innovation, create more and better jobs

Socioeconomic Planning Secretary Karl Kendrick T. Chua said on Thursday that a strong competition policy will help strengthen the Philippines’ foundation to achieve upper-middle income country status, and to sustain growth towards high-income country status in one generation.

“By fostering a business-friendly environment and a level playing field that welcomes all players, we can promote more innovation, create more and better jobs, and accelerate our growth,” Chua said during the 2022 Manila Forum on Competition in Developing Countries of the Philippine Competition Commission.

In his message, Chua said that prior to the pandemic, the Philippine government had pursued game-changing reforms to improve the country’s global competitiveness ranking. These include the enactment of the Ease of Doing Business and Efficient Government Service Delivery Act, the Philippine Innovation Act, and the Rice Tariffication Law, as well as the implementation of the Build Build Build infrastructure program.

“As a result, in 2019, our ranking improved to 44th among 141 countries in the most recent Global Competitiveness Index ranking on business dynamism. We also ranked 52nd – or top 37 percent – on product market efficiency,” Chua said.

According to Chua, during the pandemic, the Philippine government has continued to pursue reforms to improve competition which formed part of the country’s economic recovery program. Among these are the Corporate Recovery and Tax Incentives for Enterprises or CREATE Act, which lowered the regular corporate income tax and made the grant of fiscal incentives system more performance-based, targeted, time-bound, and transparent.

Apart from this, Chua said that the government is also pursuing three economic liberalization bills. These include the Amendments to the Retail Trade Liberalization Act which has been enacted, the Amendments to the Foreign Investments Act which has been sent to the President for his signature, and the Amendments to the Public Service Act which both Houses of Congress have ratified.

“These landmark reforms will relax restrictions on foreign ownership, bring in more innovation, create more and better jobs, lower prices, improve quality of service, and maximize the benefits of CREATE to attract more investments into the country,” Chua added.

On October 20, 2021, the President also signed Administrative Order (AO) No. 44 which directs the adoption and implementation of the National Competition Policy.

AO 44 provides the government with a legal framework for the adoption of pro-competition interventions to maintain market efficiency and protect consumer welfare. It also strengthens the enforcement of the Philippine Competition Act, which helps protect the public against cartels and anti-competitive agreements.

The National Economic and Development Authority chief emphasized that the successful implementation of the National Competition Policy relies on the strong collaboration among government offices and sector regulators, not only those with competition-related mandates.

“We call on everyone to work together in improving competition and raising our country’s productivity. These reforms will position the country for a strong and sustainable recovery by pushing innovation and helping us bring more and better jobs in the country,” Chua said.