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Legislation

The Philippines has been praised among developing countries as having good laws, ones that others have copied. A good example is the Philippine Mining Act of 1995 (RA 7942), considered by international authorities as among the best anywhere. But there also are some laws that have changed little over many decades, such as the Flag Law regarding government procurement, the Public Service Act (CA 146 signed in 1936) concerning public utilities and franchises, and the Philippine Immigration Act of 1940.

There is continual need to update old laws through amendments and periodic omnibus revisions, as well as to legislate for new issues not covered by existing laws. Examples would be the Rationalization of Fiscal Incentives, a comprehensive reform of 92 incentives scattered through many old laws, and information technology bills dealing with issues that hardly existed a decade ago.

The pace of legislation is usually measured, deliberate, and slow. See Table 70 for examples. A bicameral legislative body is not designed to legislate rapidly. Bills must be passed separately by both House and Senate, their differences reconciled in bicameral committee, and approved in plenary before enactment. Speeding up legislation is cited by proponents of constitutional change as one of the main reasons to return to a unicameral parliament.225

Only in the absence of a legislative body are laws passed quickly. Under martial law (1972-1980) and the post-EDSA people power revolutionary government (1986-1987) presidential decrees and revolutionary executive orders, respectively, could be drafted, signed, and promulgated much faster than under the post-1987 process. The Filipino people restored a bicameral Congress when they approved the current constitution in a referendum in April 1987.

225 When former president Marcos lifted martial law in 1980 he restored a legislative body, which he had suspended in 1972, but made it unicameral (the Batasan Pambansa).

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Occasionally bills can move through the Congress in surprisingly short periods. Sometimes these are bills introduced in successive Congresses over many years without advancing, such as the Civil Aviation Authority Act (RA 9497), neglected for 15 years and enacted only after a foreign government downgraded Philippine pilot training under the old Air Transportation Office (ATO). More recently, after the Organisation for Economic Co-operation and Development (OECD) in April 2009 put the Philippines on a blacklist of countries uncooperative in providing foreign tax authorities access to bank accounts of their nationals, the Tax Information Exchange Act (RA 10021) was introduced and passed in only a year.

Table 70: The pace of legislation, 12 bills in the 14th Congress

Bill/Act Year Date enacted/ Years to enactment/ Introduced legislative status years pendingBataan Freeport Zone Act 2006 October 23, 2009 3 (to pass)BSP Charter Amendments 1997 H-1st R, S-2nd R226 13 (pending)Civil Aviation Authority of the Philippines (CAAP) 1993 March 4, 2008 15 (to pass)227

Department of Information and Communications 2001 H-3rd R, S-2nd R 9 (pending)Technology (DICT)Eidul Adha Holiday 1998 December 11, 2009 enacted w/o consultationFinancial Rehabilitation and Insolvency Act 2000 July 18, 2010 10 (to pass)Freedom to Access of Information 1992 H-failed to approve bicam report 18 (pending)OECD Tax Information Exchange 2009 March 5, 2010 1 (to pass w/ external pressure)228

Rationalization of Fiscal Incentives 1995 H-3rd R, S-2nd R 15 (pending)Renewable Energy 1995 December 16, 2008 13 (to pass)Reproductive Health 1995 H-1st R 5 (pending)Red Tape Act 1988 June 2, 2007 19 (to pass) Source: House and Senate Bills and Index offices

Investment Climate Legislation 2001-2010

Table 71 identifies significant business and economic reform laws enacted during the last three Congresses from 2001 to 2010. The 12th Congress enacted 14 laws, the 13th Congress 6 laws, and

226 R = reading; all bills must pass three readings in committee and plenary in both House and Senate before they can be sent to the president for signature.227 After the US Federal Aviation Administration (FAA) downgraded the RP ATO, the CAAP passed the Congress rapidly, reportedly following advocacy activity by Philippine airline companies.228 In April 2009 the Philippines was included on a small list of countries that the OECD did not consider had adequate laws requiring compliance with investigations by international tax authorities. The Secretary of Finance assured the OECD that remedial legislation would be quickly passed, met with the House and Senate leaders, introduced DOF draft bills, which completed full congressional hearings and readings and were enacted in less than one year.

Figure 189: Editorial cartoon showing Congressional failure to pass a

long-standing reform bill

Source: Philippine Star, May 26, 2010

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the 14th Congress 22 laws, for a total of 42 new business and economic reform measures. Figure 190 illustrates this data.

Table 71: Business and economic reforms laws, by Congress, 2001-2010

Law Law No. Date Enacted 12th Congress (2001-04)1 Alternative Dispute Resolution RA 9285 April 2, 20042 Anti-Money Laundering Act of 2001 (AMLA) RA 9160 Sept 29, 20013 AMLA amendments RA 9194 Mar 7, 20034 Clean Water Act RA 9275 Mar 22, 20045 Documentary Stamp Tax Rationalization RA 9243 Feb 17, 20046 Domestic Shipping Development Act RA 9295 May 3, 20047 Dual-Citizenship Act RA 9225 Aug 29, 20038 Electric Power Industry Reform Act RA 9136 June 8, 20019 Government Procurement Reform Act RA 9184 Jan 10, 200310 Judiciary Compensation Rationalization Act RA 9227 Oct 23, 200311 Optical Media Act RA 9239 Feb 10, 200412 Restructuring Excise Tax on Automobiles RA 9224 Aug 28, 200313 Securitization Act RA 9267 Mar 19, 200414 Special Purpose Vehicle Act RA 9182 Dec 23, 2002 13th Congress (2004-07)15 Anti-Red Tape Act RA 9337 June 2, 200716a Bases Conversion and Development Authority (BCDA) Amendments RA 9400 Mar 20, 200716b Amnesty for Businesses in Special Economic Zones and Freeports RA 9399 Mar 20, 200717 Biofuels Act RA 9367 Jan 12, 200718 Expanded Value Added Tax RA 9337 May 24, 200519 Lateral Attrition Act RA 9335 Jan 25, 200520 Special Purpose Vehicle Act extension RA 9343 July 25, 2005 14th Congress (2007-10)21 Anti-Camcording Act RA 10088 May 13, 201022 Bureau of Food and Drugs Act Amendments RA 9711 Aug 18, 200923 Civil Aviation Authority RA 9497 Mar 4, 200824 Cooperatives Code RA 9520 Feb 17, 200926 Credit Information System Act RA 9510 Oct 31, 200827 Customs Brokers Act Amendments RA 9853 Dec 15, 200928 Documentary Stamp Tax Exemption (PSE) RA 9648 June 30, 200925 Financial Rehabilitation and Insolvency Act RA 10124 July 18, 201029 Individual Income Taxes Rate Exemption RA 9504 June 17, 200830 JPEPARatification Oct8,200831 Magna Carta for MSMEs Act Amendments229 RA 9501 May 23, 200832 National Grid Corporation Franchise RA 9511 Dec 1, 200833 National Tourism Policy Act RA 9593 May 12, 200934 Personal Equity Retirement Account (PERA) Act RA 9505 Aug 22, 200835 Philippine Deposit Insurance Corp. Amendments RA 9576 Apr 29, 200936 Pre-need Code RA 9829 Dec 3, 200937 Real Estate Investment Trust (REIT) Act RA 9856 Dec 17, 200938 Renewable Energy Act RA 9513 Dec 16, 200839 Residential Free Patent Act RA 10023 Mar 9, 201040 Revised Kyoto Convention (RKC)Ratification February 1, 201041 Tax Information Exchange Act RA 10021 Mar 8, 201042 Tax on Life Insurance Premiums RA 10001 Feb 23, 2010Source: House and Senate Bills and Index offices

229 The bill allows foreign banks the same five year period as domestic banks to obtain optimal value in foreclosure proceedings involving real estate, while respecting the constitutional provision on land ownership. Other provisions of the bill requiring mandatory lending are disadvantageous to foreign banks.

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Speeding up the pace of enactment of new laws and amending old ones should be a goal of the new Philippine administration. If in the 14th Congress 22 business and economic reform bills were enacted, perhaps this is a good reason to believe that the 15th Congress will pass many more than that number. While this would be a remarkable amount of progressive legislation, it could improve the Philippine economy and its inter-national competitiveness rankings, while inducing investment and creating jobs. With strong leadership and cooperation between the executive and legislative branches, it should be possible to vastly improve the pace of legislation.

Table 72 lists 6 laws that almost reached enactment in the 14th Congress. Because hearings and floor consideration for most of these were completed in the 14th Congress, it may be possible to enact them early in the 15th Congress. Six Philippine business groups and the seven JFC members wrote President Aquino in July 16 recommending early pass of these six measures.

Table 72: Priority bills nearly-enacted, 14th Congress

Bill Final status 1 Cybercrime Act Passed H; S – pending 2nd reading2 DICT Passed H; S – pending 2nd reading3 Freedom of Access to Information Passed S; no H quorum to approve bicam report 4 Immigration Bill Passed S; no H quorum to approve bicam report 5 Rationalization of Fiscal Incentives Passed H; S – 2nd reading6 SimplifiedNetIncomeTaxationScheme(SNITS) PassedH;S–pendingCommitteeSource: House and Senate bills and index offices

Table 73 is a list of 41 reforms for consideration in the 15th and 16th Congress. The list is organized into eight categories according to the Seven Big Winner sectors and General Business Environment. It was arrived at by a group of five Philippine business groups and the seven JFC members and has been recommended to the president, the Senate president and the House speaker. As explained below, some could first be addressed in executive orders, with laws to follow. Most of these proposals are not controversial, and could, with strong executive and legislative leadership, be enacted over the next few years. Annex 4 contains a list of other potential reform laws.

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21 Anti-Camcording Act RA 10088 May 13, 2010 22 Bureau of Food and Drugs Act Amendments RA 9711 Aug 18, 2009 23 Civil Aviation Authority RA 9497 Mar 4, 2008 24 Cooperatives Code RA 9520 Feb 17, 2009 26 Credit Information System Act RA 9510 Oct 31, 2008 27 Customs Brokers Act Amendments RA 9853 Dec 15, 2009 28 Documentary Stamp Tax Exemption (PSE) RA 9648 June 30, 2009 25 Financial Rehabilitation and Insolvency Act RA 10124 July 18, 2010 29 Individual Income Taxes Rate Exemption RA 9504 June 17, 2008 30 JPEPA Ratification Oct 8, 2008 31 Magna Carta for MSMEs Act Amendments4 RA 9501 May 23, 2008 32 National Grid Corporation Franchise RA 9511 Dec 1, 2008 33 National Tourism Policy Act RA 9593 May 12, 2009 34 Personal Equity Retirement Account (PERA) Act RA 9505 Aug 22, 2008 35 Philippine Deposit Insurance Corp. Amendments RA 9576 Apr 29, 2009 36 Pre-need Code RA 9829 Dec 3, 2009 37 Real Estate Investment Trust (REIT) Act RA 9856 Dec 17, 2009 38 Renewable Energy Act RA 9513 Dec 16, 2008 39 Residential Free Patent Act RA 10023 Mar 9, 2010 40 Revised Kyoto Convention (RKC) Ratification February 1, 2010 41 Tax Information Exchange Act RA 10021 Mar 8, 2010 42 Tax on Life Insurance Premiums RA 10001 Feb 23, 2010

Source: House and Senate Bills and Index offices

4 The bill allows foreign banks the same five year period as domestic banks to obtain optimal value in foreclosure proceedings involving real estate, while respecting the constitutional provision on land ownership. Other provisions of the bill requiring mandatory lending are disadvantageous to foreign banks.

Figure 190: Business and economic reforms laws, by Congress, 2001-2010

14

6

22

0

5

10

15

20

25

12th (2001-2004) 13th (2004-2007) 14th (2007-2010)

Source: AmCham Philippines

Figure 190: Business and economic reforms laws, by Congress, 2001-2010

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Table 73: Proposed legislation for the 15th Congress230

Legislative Priority Description231 Proponent

Agribusiness1 Agri-Agra and MSME Magna Carta Makes 25% mandatory lending optional. FGD, BAP Amendments Relieves foreign banks, (which are not located in rural areas) of mandated Agri-agra/MSME loans. (nyd) 2 Comprehensive Agrarian Reform Allows aggregation of land for corporate FGD, PCCI Program (CARP) reform farming. (nyd)3 FarmLandasCollateralAct CARPbeneficiariesmayborrow,usingtheir FGD,CSPW, land as collateral (HB 32, 2707, 3368) Philexport4 Land Administration Reform Act Rationalizes agencies dealing with land titling. MBC, JFC/PBG, (LARA) CSPW5 Rice and Corn Trade Amendment Removes divestiture requirement. (PD194) Draft available

Business Process Outsourcing6 Cybercrime Act (H passed HB 6794;SB 3553 2nd R) FGD, CICT, BPAP7 Data Privacy Act (HB 2682; SB 3129) FGD, DTI, JFC, BPAP, CSPW8 Department of Information and Strengthens CICT and raises public sector FGD, CICT, BPAP, Communications Technology (DICT) focus on e-governance. CSPW, UPOU (H passed HB 4300; SB 2546)9 Holiday Rationalization Limits total number of non-working holidays. FGD, BPAP, Philexport (nyd)10 Labor Code Amendment (Art 130) Removes prohibition on nightwork by women. FGD, JFC, BPAP, (HB 2071) ECOP, PCCI

Creative Industries11 Creative Industries Development (SB 2131) FGD, DTI Council 12 ForeignProfessionalOmnibus Simplifies45lawsregulating46professionsto JFC Amendments relax restrictions on foreign professionals and redefinereciprocity.(nyd)13 WIPO Copyright Treaty Act Amends IPR Code to conform with the World Intellectual Property Organization (WIPO) Copyright Treaty and the Performances and Phonograms Treaty (HB 3471; SB 880)

Infrastructure14 BOT Law Amendments (HB 3763) FGD, JFC/PBG, MBC, DTI, CSPW15 Convergence Act Amends RA 7925 Telecom Policy. (HB 7151; SB 608, 2145) 16 EnergyEfficiencyandConservation Institutesinitiativesaswellasapplicationof DOE,FGD,JFC Act technologyonefficientenergyuse.(nyd)17 EPIRA Amendments (HB 3124; S passed SB 2121) DOE18 NaturalGasBill Promotesnaturalgasasanefficientand DOE economical source of energy and facilitates private sector participation. (HB 4754)

230 Not all proposed bills cited in the list have been fully reviewed and may not be completely supported in the cited versions of the proposed laws. “Nyd” means not yet drafted.231 When not clear from common title. Bills cited were introduced in the 14th Congress. When no bills are cited, authors are unaware of any draft legislation.

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19 Maritime Law (cabotage) (HB 87, 76, 6828; SB 1378, 844) DTI, Philexport20 Public Utilities Act Amendments Amendsdefinitionofpublicutilitiestoexclude JFC, two presidential certain activities currently subject to foreign commissions232

equity restrictions. (nyd)21 Water Reform Act (Water Code PD Creates Department of Water. Rationalizes DTI, FGD, CSPW 1067-1976) numerouswaterinstitutions.Ensuresefficient management of water resources. (nyd) Manufacturing22 Clean Air Act (RA 8749) Amendment Allows high tech incineration (revise standards) JFC, PCCI,FPI (nyd)23 EVAT on Fuel and Power Exemption Increases competitiveness of local FGD, Philexport Eternal taxes rebate manufacturers for export and other purposes. (nyd) Mining24 Mining Act Amendments Disallows LGUs from banning mining; reduce FGD US$ 50 million threshold for large/small-scale mining. (RA 7076) (nyd)25 LGU, Automatic Retention of LGU (HB 3993; SB 3381) FGD, PCCI Shares in Mining, Taxes, Fees, and Royalties bill Tourism26 CIQ Amendment (Immigration Act Customs, Immigration and Quarantine (CIQ) FGD, PCCI and Customs Code) overtime charges should be no cost to private sector. (nyd)27 Common Carriers Tax Amendment Amends Internal Revenue Act of 1997 to FGD, PCCI (Section 118) remove tax on foreign, but not domestic airlines. (nyd)28 Gross Philippine Billings Amendment Amends Internal Revenue Act of 1997 to FGD, PCCI (RA9294/9337) remove2.5%taxoninternationalflights(nyd)29 Senior Citizens Act Amendment Allows foreign residents to avail of same FGD discounts as Filipinos. (nyd) General Business Environment30 Anti-Trust Act (competition policy) (S passed SB 3197) DTI, CSPW, UPOU31 Bank foreclosure law (RA 133), Allows foreign banks to bid and take possession CMDC Foreign bank entry liberalization law of land (w/o transfer of title). Removes limit on (RA 7721), Rural Act of 1992 (RA number of branches of foreign banks. Allows 7353) amendments foreign banks to own rural banks. Partial draft available.32 BSP Charter Amendments (HB 5958, 6334; SB 871) JFC/PBG, CSPW33 Customs and Tariffs Modernization Replaces Anti-Smuggling Act. (HB 5342) FGD, DOF, DTI Act 34 FiscalResponsibilityAct Specifiesprinciplesofresponsiblefinancial DOF,JFC,UPOU, management in public sector revenue, CSPW, Philexport, OP- spending, and borrowing. PPLO35 Foreign Investment Act Amendments Removes several rules placed only on foreign equity. Lowers minimum paid-in capital. (nyd)36 Labor Code Amendment (Art 106 to Revises contracting/ subcontracting policy. ECOP 109) (nyd)

232 December 1999, “Report of the Preparatory Commission on Constitutional Reforms” and December 2005, “The Proposed Revision of the 1987 Constitution by the Consultative Commission, with Highlights and Primers on the Major Proposals and Background Information on the Consultative Commission.”

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37 Labor Code Amendment (Art 278 to Facilitates termination of employees w/o FGD, PCCI 286) showing cause on payment of a severance benefitbasedonlegislatedformula.(nyd)38 Procurement Law Amendments Improves procedures for transparent public MAP, OP-PLLO sector procurement of goods and services. Reduces discrimination against foreign suppliers. 39 Rationalization of Fiscal Incentives233 Rationalizes incentives granted by 92 different FGD, DOF. DTI, JFC, laws;establishesrulesforfuturefiscal PBG,UPOU,CSPW, incentives. (HB 5241; SCR 784) OP-PLLO40 Retail Trade Act Amendment Allows foreign retail trade investment when meeting conditions in Foreign Investment Act (RA 7042). (nyd)41 Tax Sector Neutrality Act Rationalizes numerous small fees and taxes on JFC/PBG, CSPW financialtransactions.draftavailableSources of cited measures include past positions of the JFC and Philippine business groups; JFC Seven Big Winner focus group discussions conducted in late 2009 and early 2010; Focus Group Discussion: Philippine Investment Climate (PCCI, May 20, 2009); Barriers to Foreign Participation in the Philippine Economy: Formal and Informal Discrimination Against Foreign Investment, Professionals and Trade, (unpublished study, 2008); Gearing Up the Nation for Growth and Competitiveness (Congress Secretariat Planning Workshop, House of Representatives, July 2007); Sustaining the Growth, Spreading the Benefits (Office of the Speaker, House of Representatives, March 2008), Legislative Measures and Their Status, 14th Congress (Department of Finance, February 2010); Economic Reforms for Philippine Competitiveness (University of the Philippines Open University, 2010); and presentations at three Legislative Workshops held at AmCham in February, March, and April, 2010 by experts from the House, Senate, Office of the President, DOF, DTI and the University of the Philippines.

Use of a presidential executive order or a department administrative order can hasten the introduction and implementation of a reform. Often within months of the executive branch decision, a new policy can be implemented by the bureaucracy. For important issues enactment of a law should eventually follow.

Congress also sometimes legislates market-unfriendly laws. These have been enacted by the president in most instances, often allowing the measure to lapse into law by not signing. Presidential vetoes are rare, as objections by the executive branch to a bill moving through the Congress are usually accommodated during the legislative process. Table 74 lists market-inimical laws enacted in recent congresses.

Table 74: Market-inimical business and economic reforms laws, by Congress, 2001-2010

Law Law No. Date Enacted 12th Congress (2001-04)1 Legislated Wage Hike HB 2605 13th Congress (2004-07)2 Strengthening Workers’ Right to Self-Organization RA 9481 May 25, 2007

14th Congress (2007-10)3 Agri-Agra Law Amendments RA 10000 Feb 23, 20104 AuroraPacificEconomicZoneAct RA 10083 Apr 22, 20105 Bataan Freeport Area Act RA 9728 Oct 23, 20096 Cheaper Medicines Act RA 9502 June 6, 20087 Eidul Adha Holiday223 RA 9849 Dec 11, 2009

233 Common name for “Investment and Incentives Code of the Philippines Act”

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8 EPIRA Amendments SB 21219 Expanded Senior Citizens Act RA 9994 Feb 15, 2009 10 Income Tax Exemption and Condonation of RA 10026 Mar 11, 2010 Unpaid Taxes of Local Water Districts 11 Milk Code Amendments HB 702212 Reducing Malampaya Gas Royalty SB 328213 Security of Tenure HB 6532 14 Uniform Franchise Tax on Utilities SB 3147Source: House and Senate Bills and Index offices

LEDAC

The Legislative Executive Development Advisory Council (LEDAC) was initiated during the Ramos Administration. The president and cabinet secretaries usually met with congressional leaders every two weeks both to establish legislative priorities and to discuss the status of the priority legislation in the House and Senate.

During the two subsequent administrations the LEDAC met less regularly. The Executive Secretary’s office nevertheless maintained a list of LEDAC priority legislation, and the president continued to designate bills as “urgent” in order to speed their passage. However, for the last 12 years, the LEDAC has been less active than during the Ramos Administration (see Figure 191). Its revival should be considered as an effective means of advancing the legislative priorities of the new administration during the 15th Congress (2010-2013) and the 16th Congress (2013-2016).

Figure 191: Number of LEDAC meetings per administration, 1992-2010

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Figure 191: Number of LEDAC meetings per administration, 1992-2010

Figure 192: Editorial cartoon showing need for Congress to address the country’s woes

Source: Philippine Star, July 28, 2010

Headline Recommendations

1. The president should hold regular LEDAC meetings of executive and congressional leaders. LEDAC should prioritize the administration’s legislative agenda and monitor its progress throughout the legislative process.

2.

Prioritize bills that improve competitiveness, increase investment and revenue, and create jobs, in order to accelerate economic growth. Use executive orders and revision of IRRs to start reforms, following up with legislation as needed.

3.

Pass legislation much more rapidly, especially for business and economic reforms. Prioritize key legislation that was close to final passage in the 14th Congress or that reached 2nd/3rd reading in either the House or the Senate.

81

3

25

0 10 20 30 40 50 60 70 80 90

Ramos (1992-1998)

Estrada (1999-2000)

Arroyo (2001-2010)

Source: LEDAC Secretariat

Figure 192: Editorial cartoon showing need for Congress to address the country’s woes

Source: Philippine Star, July 28, 2010

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Headline Recommendations

The president should hold regular LEDAC meetings of executive and congressional leaders. LEDAC should prioritize the administration’s legislative agenda and monitor its progress throughout the legislative process.

1.

Prioritize bills that improve competitiveness, increase investment and revenue, and create jobs, in order to accelerate economic growth. Use executive orders and revision of IRRs to start reforms, following up with legislation as needed. Deter market-inimical bills.

2.

Pass legislation much more rapidly, especially for business and economic reforms. Prioritize key legislation that was close to final passage in the 14thCongress or that reached 2nd/3rd reading in either the House or the Senate.

3.

Recommendations: (13)

A. The president should hold regular LEDAC meetings of executive and congressional leaders. LEDAC should prioritize the administration’s legislative agenda and monitor its progress throughout the legislative process. (Immediate action OP and Congress)

B. Prioritize bills that improve competitiveness, increase investment and revenue, and create jobs, in order to accelerate economic growth. The chairs of the committees to which such bills are referred can be asked to conduct hearings and complete their committee reports in the early months of the 15th Congress. Deter market-inimical bills. (Immediate action LEDAC and Congress)

C. Pass legislation much more rapidly, especially for business and economic reforms. Prioritize “low-hanging fruit” legislation that was close to final passage in the 14th Congress or that reached 2nd or 3rd reading in either the House or the Senate. (See Table 72) (Medium-term action Congress)

D. Set a target to pass many more investment climate reform bills in the 15th and 16th Congress. (See Table 73 for potential bills) (Medium-term action Congress)

E. Use executive orders to introduce reforms quickly. Follow-up as needed with laws to make the reforms more permanent. (Immediate action OP and executive branch departments)

F. Revising Implementing Rules and Regulations (IRRs) of laws and executive orders is another way to achieve reform. For example, removing the 60-40 equity provision of the Renewable Energy Act and completing the amendments of the BOT Act can encourage more investment in renewable energy projects and public-private partnerships. (Immediate action NEDA, DOE, DOF)

G. The Executive Secretary should assess how a bill passed by Congress affects competitiveness and job creation. The assessment should be made public. (Immediate action OP)

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H. Seek to make the Foreign Investment Negative List (FINL) more positive, thereby leveling the playing field for foreign investors. Review all restrictions in the FINL to determine which continue in the national interest and recommend changes in those considered to be out of date. Implement the recommended changes. (Medium-term action OP, NEDA, DTI and other agencies, Congress, and private sector)

I. Simplify the present 45 laws regulating 46 professions to relax restrictions on foreign professionals and redefine reciprocity. Draft and seek passage of an omnibus law amending the present restrictions and establishing a uniform policy consistent with the current role of Philippine professionals in the global workplace. (Immediate action PRC and Congress)

J. Clarify that foreign investors can own firms providing services of PRC-certified professionals as long as the requirements of the Foreign Investments Act of 1991 (RA 7042) are met (US$ 100,000 paid-in capital and 50 employees). (Immediate action DTI and PRC)

K. Seek to reduce and remove discrimination against foreign firms in Philippine government procurement laws, regulations, and practices, bringing them into conformity with international best practice.234 Encourage the GRP to adhere to the WTO Agreement on Procurement. (Immediate action NEDA, DTI and Congress)

L. Encourage new investment in selected regulated public utility activities by using language similar to Section 6 of the EPIRA (RA 9136), which clearly states that power generation shall be competitive, not be considered a public utility, and not require a franchise. (Immediate action NEDA, DOJ, and relevant departments)

M. Develop a comprehensive Philippine Legal Code and Code of Regulations to create an inventory of laws and regulations. Make the inventory accessible on the internet. The Civil Code (RA 386) was signed in 1949. (Medium-term action by DOJ, Congress, and private sector)

234 The Government Procurement Reform Act of 2003 (RA 9184) covers procurement by all government offices and corporations. RA 9184 designates competitive bidding as the method of procurement. While goods may be obtained from either local or foreign suppliers, preference may be given to domestically-produced and manufactured goods that meet the specified standards (Article XII, Section 43). GOCCs can be awarded government contracts without going through the bidding process. The IRRs for RA 9184, revised in 2009, contain provisions regarding procurement which favor local goods and service providers. For infrastructure projects contracted to the private sector, the BOT Law of 1990 (RA 6957) provides for the employment of Filipino labor in different phases of the construction phase (Section 2-a) which is re-affirmed in the Amended BOT Law of 1994 (RA 7718). Moreover, for infrastructure projects that require a public utility franchise, the facility operator must be at least 60% Filipino-owned (Section 2-a). CA 138 (also known as the Flag Law of 1936), wherein the procurement of supplies, materials or public works for public use shall be purchased from domestic suppliers. In the case of public bidding, the award shall be given to the domestic entity making the lowest bid (Sections 3 & 4).