NEDA backing most of PCCI’s Aquino agenda

by Jo Javan a. Cerda, BusinessWorld

Posted at Oct 18 2010 09:57 AM

MANILA, Philippines - Most recommendations proposed by a business group to the new government have been received favorably by the National Economic and Development Authority (NEDA).

"We have reviewed the proposals of the Philippine Chamber of Commerce and Industry (PCCI) relating to anti-corruption, fiscal rebalancing, as well as competitiveness and jobs, and find that most of these may be supported," Socioeconomic Planning Secretary Cayetano W. Paderanga, Jr. said in a letter last month to PCCI President Francis C. Chua.

The PCCI sent its Philippine Business’ 2010 Action Plan to President Benigno C. Aquino III shortly after he took office in June, Mr. Aquino referred the document to the NEDA for action, Mr. Paderanga said.

Among the recommendations was a reduction in subsidies to government-owned and controlled corporations (GOCCs) and government financial institutions "without sacrificing safety nets for the poor".

"The proposal is well taken...," Mr. Paderanga said.

The agency is also endorsing legislation such as the fiscal responsibility bill and reforms "to ensure transparency and accountability in GOCC accounts".

The Department of Finance (DoF), the NEDA said, is considering the adoption of performance standards and compensation caps for appointees to GOCC boards. A review and refocusing of GOCC mandates and proactive management of future liabilities is also being studied.

"Special attention will be given to agencies with large deficits: National Food Authority, National Power Corp., Light Rail Transit Authority and National Irrigation [Administration]," the NEDA said.

Regarding the PCCI’s proposal to reduce fiscal incentives and restructure excise taxes on "sin" products, the NEDA said it supported this but added that provisions of bills filed by legislators also had to be studied.

A suggestion to implement a magna carta for micro, small and medium enterprises was also favored.

The NEDA, however, raised concerns about the PCCI’s proposed Comprehensive Industrial Development Plan (CIDP). "Enacting the CIDP into law could have the effect of locking in the country for 25 years to implement and comply with policies, programs, projects and activities that may no longer be relevant, viable or useful," it said.

The NEDA rejected the PCCI’s proposal that the government hire workers on a three-year contractual basis to develop their "competitive edge."

"While the policy of the government is to create competitive jobs, it does not necessarily mean that the hiring of workers would be done by the government itself," it said, adding that this will result in an unnecessary increase in personal services expenditures.