European companies are ready to invest in the Philippines and turn it into a digital hub in the region, but the country should strongly implement policies that support a digital trade environment and accelerate technological transformation, an international trade expert said.
Colette Van der Ven, trade policy expert with the International Trade Centre, has underlined the importance of a Philippine-European Union free trade agreement (FTA), saying it can help transform the Philippines into a regional digital hub through the launch of the EU’s Digital Economy Package for the country.
The FTA will also support the implementation in the Philippines of Global Gateway, the EU’s overarching cooperation framework to deliver sustainable investments accompanying a state’s transition to a green and digital economy.
Van der Ven, who gave a talk at the EU-Philippines Partnership Conference on Dec. 5, said trade is a digital enabler because it can “unleash digital growth in the Philippines and support SMEs.”
Robust trade can provide opportunities for digital acceleration because it can lead to the enhancement of the digital infrastructure, creation of a digitally enabling environment, and access to goods, services, and technologies needed for the country’s digital transition, she continued. Moreover, it can open up new market opportunities for digitally enabled products and services from the Philippines.
However, Van der Ven at the same time noted that the Philippines has more restrictive regulations on foreign direct investments (FDIs) compared to some of its ASEAN peers like Malaysia, Vietnam, Thailand, and Indonesia.
Citing the FDI Regulatory Restrictiveness Index 2019 of the OECD, she said, “You can see that the Philippines is much more restrictive across the board except for the retail sector… so FDI inflows have not been as strong as compared to other regional countries.” But Van der Ven said the passage of new laws liberalizing trade and foreign ownership in the country can only help to loosen this restrictiveness.
Meanwhile, asked about policy improvements that can enhance digital trade opportunities in the country, reactors said there are actually very few regulations that need to be drafted or amended.
Senen Perlada, executive vice president of the Philippine Exporters Confederation, Inc., pointed out that the laws in the country are more than sufficient, but that some of these are still missing their implementing rules and regulations.
“We have enough laws. We just need to implement and follow the spirit of the law and provide resources,” he said.
If there is one regulation that still needs crafting, it is policies on blockchain, Perlada added. Blockchain is a distributed and public digital ledger that records transactions across many computers, and this record cannot be altered retroactively without altering all subsequent blocks and the consensus of the network.
Meanwhile, Roehl Gurango of the National ICT Confederation of the Philippines pressed for the urgent passage of the Open Access bill. This proposed legislation seeks to address the legal obstacles and outdated laws that put up high barriers to the entry of new ICT players and perpetuate a costly and inefficient way of installing broadband infrastructure.
Also suggested by the other panelists are the signing of more FTAs by the Philippines, further simplification of regulations and the political will for their implementation, especially the Ease of Doing Business law, and policies that will raise the awareness of the common Filipino about what the new laws are about and how these can benefit them. – Press release