Opposition Senator Says Transparency and IT Key to Improving RP Competitiveness

MANILA (Sept. 13) — Opposition Senator Chiz Escudero said transparency and the adoption of a collective “IT mindset” are the key to improving the country’s dismal showing in the recently released Global Competitiveness Report 2009-2010 by the World Economic Forum (WEF).

“I am not surprised at all by the recent results of the competitiveness report. A closer look at the country’s state of infrastructure and the way business is done, particular with the public sector, would explain everything,” Escudero said.

He said business costs in the Philippines remain high because of several factors that include high “transactional costs” resulting from graft and corruption, high cost of electricity, and poor infrastructure which jacks up transportation costs.

“Eradicating ‘transactional costs’ such as under-the-table payments will have an immediate impact on the country’s competitiveness,” Escudero said.

He said smuggling, for instance, has remained rampant and continues to dampen the country’s competitiveness.

“On the average, around P300 billion is lost through the BIR and the BOC. Why? Officials or employees of these agencies exercise discretion. In my book, discretion in government offices is equal to corruption. Minimize discretion and you minimize corruption. Eliminate discretion and you eliminate corruption,” the senator said.

At the same time, Escudero said it was time for the government to embrace information technology (IT) as a platform for governance. He said IT promotes transparency and increases participatory democracy.

“One reason why we lag behind our neighbors like Malaysia and Thailand in competitiveness is because of our poor IT adoption.  We have an incoherent government strategy for IT to start with.  This is why I support the move to transform the Commission on Information and Communications Technology (CICT) into a line agency. This can accelerate the development of IT in the country,” he said.

According to a US government report on telecommunications in the Philippines, internet penetration remains at a dismal six percent of the population. As of 2007, there were only 5.3 million Internet users in the Philippines with a national population of 88.5 million.

“The procurement law should be revisited to improve the government’s IT equipment. At the moment, government agencies are stuck with poorly-made equipments that break down regularly. Procurement laws require that we award supply contracts to the lowest bidders, not necessarily to the best bids,” Escudero said.

“We should revisit the law so that considerations other than costs, such as quality, can be factored in the awarding of supply contracts for IT equipment,” he added.

In the WEF’s competitiveness report, the Philippines ranked 87th behind countries like Vietnam (75th), Thailand (36th) and Malaysia (24th).

The report said the most problematic factors for doing business in the Philippines were corruption, as cited by 24.3 percent of respondents; inefficient government bureaucracy, 20.6 percent; inadequate supply of infrastructure, 15.0 percent; policy instability, 12.6 percent; access to financing, 5.2 percent; tax regulations, 4.8 percent; crime and theft, 3.3 percent, and tax rates, 3.3 percent.

The Philippines had also ranked dismally in the 2009 World Competitiveness Yearbook prepared by the IMD Business School in Lausanne, Switzerland.

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