Public policy shapes a country’s development. To capture the Philippines’ legislative accomplishments over the last ten years, Philippine Business reviews the laws that were supposed to have the most impact on the economy.

RA 7042 Foreign Investment Act
13 June 1991
The law allowed foreigners 100% equity in almost all sectors except in areas included in a negative list. The list contains investment areas restricted to foreign investors – those that are sensitive to national defense and security, areas which pose risk to health and morals, and those that pose threats to the viability of small and medium enterprises. However, the negative list is periodically reviewed to open up even more areas for foreign investors.

RA 7653 Bangko Sentral Act
14 June 1993
Renaming the Central Bank of the Philippines to Bangko Sentral ng Pilipinas, the law gave the BSP a clear financial slate by transferring obligations to the national government. It also strengthened and professionalized the Monetary Board by increasing the number of private representatives from three to five. Ten years after RA 7653 was signed into law, the Monetary Board has built the needed policies which resulted in stable inflation and interest rates.

The expanded BOT Act allowed the financing, construction, and operation of infrastructure projects by the private sector

RA 7718 The Expanded Build-Operate-and-Transfer Act
5 May 1994
As of August 2002, a total of US$16.7 billion BOT projects have been completed, says the Coordinating Council for Private Sector Participation. The projects were mostly on infrastructure and utilities, the biggest of which are the US$7 billion MWSS privatization followed by the US$1.2 billion Sual Coal-Fired Thermal Power Plant of Mirant Phils. Projects costing at least US$5 billion are ongoing, while US$3.5 billion worth are in the pipeline. RA 7718 amended sections of RA 6957 which authorized the financing, construction, operation and maintenance of infrastructure projects by the private sector. The law also provided incentives for projects exceeding P1 billion.

RA 7721 Foreign Banking Act
18 May 1994
RA 7721 allowed additional foreign banks to establish full commercial operations in the Philippines. They were given the option to either purchase up to 60% of the voting stock of an existing bank or to invest 100% in a new banking subsidiary incorporated in the Philippines. These new banks may also establish up to a maximum of six branches. Ten new foreign banks entered in addition to the four existing before the law was passed.

The deregulation of the oil industry allowed the entry of new players like Seaoil and City Oil

RA 8180 Deregulating the Downstream Oil Industry
28 March 1996
The law deregulated the downstream oil industry or the business of importing, exporting, re-exporting, shipping, transporting, processing, refining, storing, distributing, and marketing, crude oil, gasoline, diesel, LPG, kerosene, and other petroleum products. The law prohibited cartels and monopolies as well as predatory pricing. It also ensured maintenance of the minimum inventory of oil companies and the use of clean and safe technologies. New players in the oil industry such as Total, Flying V, Seaoil and Unioil came in to enhance competition as soon as government restrictions were removed.

RA 8424 Comprehensive Tax Reform Act
11 December 1997
The government slipped into fiscal deficit after 1997, tax effort deteriorated, and not all provisions of the law were immediately implemented. This law amended the National Internal Revenue Code (EO 273) which empowered the Bureau of Internal Revenue to decide disputed assessments, refunds of internal revenue taxes, fees, and penalties imposed. The law also prescribes various taxes imposed on individuals, corporations, estates and trusts, as well as the computations of value-added tax and other percentage taxes.

RA 8749 Clean Air Act
23 June 1999
This law prescribed a comprehensive management program for air pollution. As such, air quality guideline values and standards were stipulated. It also provided emission standards for all motor vehicles, including more stringent fuel specifications. Industry players, though, say engine maintenance and the phase-out of old vehicles are other areas for improvement. Passed three-and-a-half years ago, the air in Metro Manila today is dirtier than ever.

RA 8762 Retail Trade Liberalization Act
7 March 2000
This law liberalized the retail trade industry to provide Filipino consumers lower prices, higher quality of goods, better services and wider choices by allowing foreign-owned corporations to invest in retail trade business. But except for Watsons, S & R Price Club, and the 7-11 buy in, only a few foreign retailers took advantage of the incentives offered by the law. The disincentive to new players continued to be the stronghold of local retail giants in the country and the high thresholds for entry. Still, most investors are looking for local partners, given the fact that locals know more about the domestic market.

Despite the passage of this law, foreign investors still think that it is restrictive. While it lifts the 45-year-old foreign equity ban on Philippine retail operation, the law still does not allow foreign land ownership.

RA 8792 Electronic Commerce Act
14 June 2000
The E-Commerce Act provided legal recognition of electronic data messages and electronic documents, including electronic signatures provided they are authenticated. The Supreme Court has now provided rules on electronic evidence in case of civil actions or quasi-judicial and administrative cases. The law also promoted electronic commerce and mandated government agencies to allow the public to transact electronically (e.g. filing of documents and payment of fees). As of September 2002, almost 97% of national agencies have websites but most are strictly informational. Many are still gearing towards the transactional phase.

RA 9136 Electric Power Industry Reform Act
8 June 2001
The law created the National Transmission Corporation (TRANSCO) primarily to assume the transmission function of the National Power Corporation. RA 9136 sets the framework to restructure the electric power sector as well as the privatization of NPC’s assets. It allowed the widening of private ownership base in the power generation, transmission and distribution sectors but at the same time prescribed protection of public interest in terms of rates and services. The PSALM (Power Sector Assets and Liabilities Management Corp.) was created to absorb all existing NPC generation assets, liabilities, IPP contracts, real estate and all other disposable assets. Still, a few key missing pieces of legislation has prevented a full-blown reform program.

RA 9160 Anti-Money Laundering Act
29 September 2001
This law penalizes the crime of money laundering where proceeds of an unlawful activity are transacted but made to appear to have come from legitimate sources. An Anti-Money Laundering Council was created to review reports on covered transactions, to determine its owners and initiate investigations, and freeze any money property alleged to be proceeds of any unlawful activity. However, a money laundering case cannot be filed for political harassment, thus no assets shall be frozen to the prejudice of a candidate for electoral office. In spite of its passage, the Philippines failed to meet all FATF requirements. The Paris-based Financial Action Task Force gave the Philippines until February 2003 to lower the threshold amount for covered transactions from P4 million to at least P500,000 and remove any delays in investigating suspected money laundering activities.