THE World Trade Organization (WTO) noted that the Philippine government has liberalized some sectors like professional services, but other areas of the economy have “limited” foreign participation in agriculture, telecommunications and public utilities.
According to a report issued by the WTO secretariat and posted on the organization’s website, some issues remain from the WTO’s 2012 review of Philippine trade policy, but the government has also made progress in opening up the economy according to WTO norms.
The WTO is in the process of conducting a fifth review of Philippine trade policy, and the Secretariat report and the Philippine government’s own report will form the starting points for the review in Geneva on March 26 and 28.
The Secretariat report also noted that the Philippines saw a “strong inflow” of foreign direct investment (FDI) “especially after 2013.” FDI inflows in 2011 were at $1.9 billion, compared with $7.9 billion in 2016.
“This resulted largely from the improvement to the economic fundamentals and business environment, as well as from sound macroeconomic policies,” it said.
But it said further success in attracting FDI remains hampered by the lack of “good infrastructure, FDI restrictions and weak competition environment” especially in transport and housing.
The report noted that the “overall competition environment remains weak in many sectors,” even after the Philippines passed a Competition Act in 2015 and established a competition regulator a year later.
As noted in the 2012 review, the Secretariat noted that the Philippines is “neither a signatory nor an observer of the Plurilateral Agreement on Government Procurement,” one of the measures seen restricting foreign participation in local bidding processes.
The Philippines said in its own report the growth of the economy with the significant improvement in several industries especially manufacturing.
But the WTO deems high production costs a “common challenge” to the manufacturing sector due to “inadequate infrastructure.”
The Philippines cited the administration’s infrastructure investment agenda, known as “Build, Build, Build” (BBB), which was launched in 2016 to accelerate infrastructure development and investment to support economic and social growth.
“The BBB identified high-impact projects to be implemented within and outside the National Capital Region such as railways, urban mass transport, airports and seaports, roads and bridges, among others. The programme is set to roll until 2022 envisioning the increase of productive capacity of the economy, create jobs,” it said.
The government noted improvements in other sectors such as services, business process management and the tourism-related subsectors.
“These are markers of the structural transformation that is taking place in the Philippine economy, which is crucial for sustaining growth and generating quality jobs,” it said.
The WTO reviews the trade policies of developing countries like the Philippines every six years. — Janina C. Lim