Home News Competition will boost growth of PH economy—World Bank

Competition will boost growth of PH economy—World Bank

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A recent study conducted by the World Bank shows that lack of competition slows down the growth of the Philippine economy.

The World Bank presented the report entitled, ‘Fostering Competition in the Philippines: The Challenge of Restrictive Regulations,’ in Makati City.

Sitting in the panel during the launch are World Bank Group Country Director Brunei, Malaysia, Philippine, and Thailand Dr. Mara Warwick and Philippine Competition Commission (PCC) Chairman Arsenio M. Balisacan.

According to the World Bank, the Philippine economy is ‘more concentrated’ than other economies in the region. It added that fostering fair market competition in key sectors such as electricity, telecommunications, and transport can boost economic growth.

The World Bank said that these industries could improve their services, generate high-paying jobs, and hasten poverty reduction if more players join the competition.

Slow implementation of reforms

Senior World Bank economist Graciela Murciego said, on the other hand, that while the Philippines has adopted fundamental changes to foster competition, the slow implementation of these reforms hinders its potential benefits to the consumer. She added that high prices and limited choices are among the effects of the gradual implementation of economic reforms.

The World Bank mentions that in the Philippines, electricity costs are high and the capacity is limited. They attribute it to the slow implementation of the open access provisions and retail competition under the Electric Power Industry Reform Act of 2001. Furthermore, limitations on foreign direct investments prevent the development of electricity infrastructure.

Meanwhile, the cost of mobile services in the country is the highest in East Asia and four times higher than the average price of the said service in rich countries.

The domestic shipping industry is also among those who suffer because of lack of competition. As a result, domestic shipping in the Philippines is more expensive than in Malaysia or Indonesia.

PCC, for its part, responds by saying that reforms are underway. Balisacan said that they are finalizing the National Competition Policy. It lays out a comprehensive framework that will steer regulations and administrative procedures. These provisions, Balisacan said, will promote free and fair market competition.

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