The oligopolies block the development of the Philippines; more IDE needed – Salceda

Delon Porcalla (The Philippine Star) – June 14, 2021 – 12:00 am

MANILA, Philippines – The Philippines continues to lag behind its Asian neighbors, in part due to the influence of oligopolies over virtually every government and, as such, the businesses of local tycoons thrive and deprive the country of direct investment foreigners essential.

This is the assessment made recently by Albay’s representative Joey Salceda on the state of economic affairs in the country, during a recent digital forum sponsored by the Home Office and Local Government (DILG).

“Operating like monopolies and oligopolies, business conglomerates find it convenient to restrict production and investment below competitive level,” said the economist lawmaker who chairs the House Ways and Means Committee.

An oligopoly exists when a market or industry is dominated by a small group of large producers and sellers.

Citing the country’s low FDI, Salceda explained that the “willingness to invest” of foreign investors is “hampered by their concentrated ownership structure and their uncertainties about the stability and duration of government favoritism.”

The webinars led by DILG are being held in support of the Two Chamber Resolution 2 (RBH 2), drafted by President Lord Allan Velasco, which seeks to open the country to more foreign investors by amending the restrictive economic provisions of the Constitution.

Asked about the impact of the opening up of the economy on micro, small and medium enterprises (MSMEs), Salceda said more FDI should benefit competition in the market.

“Restrictions on FDI lead to a lack of competition in the country, which increases oligopolistic power and reduces the need to invest. As a result, it is the oligopolies who take advantage of the profits, influence the law and prevent foreign competitions from entering the Philippines, ”he said.

Salceda lamented that while the constitution of the post-Marcos country guaranteed that dictatorships would never see the light of day again, its very rigid protectionist economic policies allowed domestic industries to be controlled by oligopolies.

“By trying to be nationalist with our Constitution, we have ironically fattened our national oligopolies, to the detriment of the people. Unfortunately, and once again, we are the most oligopolistic market in the region, ”he said.

Seeking to correct this is what prompted the House to approve RBH 2 at third and final reading on June 1st. It is now pending before the Senate.

Ako Bicol party list representative Alfredo Garbin Jr., who heads the House committee on constitutional amendments, remarked last Saturday on Independence Day that Filipinos should be “free” from “economic channels. “of the Constitution of 1987.

“Twenty (20) years of the 21st century have passed and we now realize that we cannot prosper in the remaining decades of this 21st century if we remain chained to these restrictive economic provisions,” Garbin said, urging the Senate to act. . on RBH 2.

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