Enhancing Competitiveness for Inclusive Growth Working Group on Decentralization and Local Governance Sub-Theme 2

2 Strategic Directions to Competitive Economy  Improving Transaction Flows and Reducing Costs  Accelerating Infrastructure Development  Strengthening the Development of Industries with high impact potential (SMEs, tourism, agribusiness, mining, IT-BPO)  Providing for Ecological Integrity  Creating Effective Access to Financing

Figure : Ranking on the Ease of Doing Business Among Asian Countries Source: Doing Business 2008

Figure: Ranking on the Number of Procedures to Start a Business Among Asian Countries (Source: Doing Business database)

Figure : Ranking on the Cost to Start a Business Among Asian Countries (Source: Doing Business database)

Infrastructure bottlenecks Critical infrastructure = roads, power, transport, water Philippines underinvests in physical infrastructure; ave rage spending is 2% of GDP and this share has been declining in the last 10 years inefficient ground transport infrastructure facilities that increases the cost of moving goods and people absence of modern international gateway airport that restricts tourism, trade and investment power sector is unreliable and expensive. Electricity prices in the country are among the highest in the country

Poor quality of living Ecological integrity implies providing for good quality of living healthy and clean environment attracts more investments (tourism). Healthy and clean environment impacts on health and productivity (competitiveness of human resources)

Critical Role of LGUs LGUs provide the support systems for investments through the ff: - permits and licensing - provision/implementation of incentives - physical planning and zoning - national and local road network (incl. transport planning and implementation) - enforcement of environmental laws

Key Policy Issues and Proposed Agenda 1. Improve transaction flows and costs  Streamlining bureaucratic procedures and reduce processing time  Institutionalize e-governance Proposed Policy Agenda − Upscale BPLS − Set up one stop shops for business facilitation

Key Policy Issues and Proposed Agenda 2. Development of Industries with High Impact  Providing consistent and predictable investment policy environment with national government Proposed Agenda − Harmonize local investment code with Omnibus Investment Code − Integration of designated special economic zones in the Comprehensive Development Plans (CDPs) − Lead formulation of National Tourism Development Plan to harmonize with local tourism development plans − Review of the Philippine Mining Act and harmonize with local development plans − Amend LGC to support national investment codes

Key Policy Issues and Proposed Agenda 2. Development of Industries with High Impact  Encouraging diversification and entrepreneurship in agriculture Proposed Agenda: − Expand Sustainable Upland Development (SUD) model − Provide innovative market linkages (e.g. Food Terminals, Bagsakan Centers) − Support Agrarian reform communities

Key Policy Issues and Proposed Agenda 3. Infrastructure Development  Pursuing infrastructure initiatives through PPP Proposed Agenda − Develop PPP guidelines for LGUs − Capacity building for PPP team

Key Policy Issues and Proposed Agenda 3. Infrastructure Development  Pursuing reforms in local infrastructure development and management Proposed Agenda − Regional or metropolitan cluster for road network − Support development of Comprehensive and Integrated Infrastructure Plan − Improve local road construction through competitive procurement processes − Adopt quality management systems (ISO standards)

Key Policy Issues and Proposed Agenda 4. Quality of Living  Encouraging investment in solid waste and sanitation Proposed Agenda - Strengthen PPP in waste management

Key Policy Issues and Proposed Agenda 4. Quality of living  Enforcing environmental controls Proposed Agenda -Incorporate sustainability practices and disaster risk management standards in CLUPS/zoning -Improve national-local interface by allowing NGA representatives to participate in LDC deliberations - Create metropolitan or regional scale management (clustering) for flood management, sanitation,SWM

Priority LGU Policy Issues Streamlining the bureaucracy Improving coordination: national and local, - Investment Codes, Investment incentives - Tourism Plans, Mineral Action Plan - Infrastructure plans -Master planning for environmental concerns (flood mgt, SWM, sanitation) PPP

Thank you