Fidel Ramos signs laws to pry open RP economy

Fidel Ramos signs laws to pry open RP economy

MANILA (Reuter): President Fidel Ramos signed a clutch of laws
yesterday aimed at further prying open the Philippine economy
despite warnings by a leftist group which said it would
vigorously oppose the measures.

Ramos signed laws deregulating the oil industry, abolishing
quantity restrictions on agricultural imports, and changes to
make the foreign investment act more attractive to investors.

"The signals are clear. The Philippines is determined, ready
and eager to compete in a liberalized multi-trade order," Ramos
said in a speech after signing the laws.

The oil industry will be fully deregulated by March 1997 and
allow market pricing of petrol products to reflect world prices.
Increases of oil prices have often drawn vociferous protests in
the country.

"The ripple effect created by deregulating this basic industry
will be far-reaching and will include the...creation of more
quality jobs," the Philippine leader said.

Several oil companies have indicated they plan to set up
refineries in the Philippines when the industry is deregulated.
Royal Dutch Shell Group, Caltex, a joint venture of Chevron and
Texaco, and Petron are the three players in the oil industry
here.

Restrictive barriers to agricultural imports were also
abolished to allow imports of all farm products except rice, the
staple food of the country's 68 million people.

"This will make the economy more efficient and should help the
government's fiscal picture," Noel Reyes, research chief of
Anscor-Hagedorn Securities, told Reuters in a phone interview.

"This will make the economy efficient and forces us to live
within our means. Restrictions on farm imports protected a lot of
landed families. We're going to take that net out from under
them," he added.

The government will set up a system of tariff rates for
agricultural goods instead of restricting their imports. Under
the old law, restrictions were imposed on imports of coffee,
onions, potatoes, garlic, cabbages and corn, and the government
was required to declare a shortage before imports were allowed.

Failure to approve the law would have exposed Manila to
possible sanctions from its trading partners in the World Trade
Organization, Ramos said.

The leftist Farmers' Movement of the Philippines (KMP) warned
the government in a statement on Tuesday the law would flood the
country with "cheap, subsidized imports."

"We call on other sectors of the Filipino people to join us in
our vigorous struggle against this sell-out," the KMP said.

But Ramos ignored the protests and said the measures would
make the economy more efficient.

The law which amends a previously-approved investment law will
lower the minimum paid-up equity requirement for foreign-owned
companies to US$200,000 from $500,000. For firms in high-tech
enterprises, the yardstick was further reduced to only $100,000.

"All of these steps are necessary to opening up the economy,"
Louie Bate of ING Baring Securities said in an interview.
"Consumers would benefit in the long-run through lower prices and
that is the bottomline."