THE Apec (Asia-Pacific Economic Cooperation) Business Advisory Council (Abac) recommended to the Supreme Court (SC) on Saturday to strengthen the rule of law to attract more foreign investors to the Philippines.
In her speech at the Abac Women’s Luncheon, Abac Chairman and CEO Doris Magsaysay-Ho said there are rule of law issues in the Asia-Pacific region, including the Philippines, particularly on transparency of government transactions and predictability of the application of laws.
The Abac Women’s Luncheon kicked off the Abac discussions in this year’s Apec Economic Leaders’ Meeting, following an opening session at the Fairmont Hotel in Makati City. The Abac Women’s Luncheon is hosted each year to promote the participation of women in the region’s economic development.
“There are many investors who come to the economies that have open trade and investment laws only to find major impediments consisting of unfriendly laws, unfriendly interpretation of good laws, or friendly interpretation of bad laws,” Magsaysay-Ho said as part of her speech to introduce the keynote speaker, Chief Justice Maria Lourdes Sereno.
Magsaysay-Ho said the prevalence of the rule of law is among the issues that will be tackled in the Apec Summit in Peru next year, and one of the agenda being pushed by Abac, which is tasked to recommend policies to government leaders to enable business to have larger markets.
In the Philippines, among the problems that confront foreign investors include taxation issues, particularly the Bureau of Internal Revenue’s (BIR) interpretation of tax laws.
Recently, the BIR’s regulation, which deemed denied the pending applications for refund of excess input value-added tax, had become the subject of many complaints from foreign investors whose VAT refund applications run into the billions of pesos.
Last year the SC resolved one of the issues that foreign investors frequently complain about which was the requirement of the BIR to secure prior approval for tax treaty relief before they can avail of reliefs provided for under tax treaties signed by the Philippines.
The SC resolved the issue in favor of foreign investors by holding that the BIR cannot impose additional requirements for availing of privileges granted under a tax treaty signed by the Philippines.
In response to questions regarding the Philippines’s efforts to strengthen the rule of law, Sereno said that the SC is making sure that there are no more contradicting decisions anymore in the divisions of the SC.
She said that working groups have also been created to engage academe, the business sector, and other stakeholders in business to find out the areas of judicial interpretation that businesses are most sensitive to.
In the area of commercial litigation, which dwells mostly on insolvency proceedings and rehabilitation or conservatorship, she said the country’s commercial courts are now run by highly trained commercial court judges who conduct continuous trials to speed up the court processes.
“I hope that within the next couple of years, I can already show the efficiency of the commercial courts, so the long and short of it is that it’s getting there,” she said.
In her keynote speech for the event, Sereno said the participation of women in the government and business can help in strengthening the rule of law in the Philippines.
Sereno said that by strengthening the rule of law, the country would level the playing field by making the regulations more transparent, fair and predictable and eliminate corruption by shunning the “old boys’ club” ways of doing business.
She said that women will be able to contribute to realizing these courses of action because based on anecdotal evidence from around the world, male judges are more prone to corruption that female judges especially in countries that are still building up their rule of law.
“This is because they shun the night life, they usually proceed to attend to family or community responsibilities after work, and in such a setting it is difficult to strike a deal, so to speak,” she said.
Image credits: Stephanie Tumampos