Session Title:

AEI: The Role of the Business Sector in Building Competitiveness of Local Governments
Session/ Presentation Objectives:
The discussion practically spins on the role of Business Sector in Building Competitiveness of Local
Governments in the context of ASEAN Economic Integration.
Session Moderator/ Speaker:
Ryan Patrick Evangelista
Resource Speakers/Sharers:
The topic was presented by the Secretary General of PCCI, Crisanto Frianeza.
Proceedings/Highlights:
Secretary General Crisanto Fraineza emphasizes the importance of Public- Private Partnership (PPP). The major
points are below:
-

PPP is an important element in providing a sound policy environment that will promote development and
inclusive growth in country.
It involves partnerships with both national and local governments working together to creating an
environment of citizens seeing themselves as stakeholders.
The partnership has become more compelling with the recent global trends such as free trade areas
and ASEAN integration.
The benefits of ASEAN integration will be fully realized if the business sector and LGUs work together in
encouraging more businesses and industries to develop and sustain their engagement in global value
chains and production networks towards more competitive growth.
With the combination of expertise from business and local governments, new and appropriate strategies
and measures will be developed. This will allow countries to compete effectively.

He also provided some relevant insights on competitiveness:

-

The competition is not with other LGUs but with other areas around the world; and
Competition is worldwide. LGUs should not go into regional competition, instead, pool their resources
and jointly market their region abroad;

To attain the effective competitiveness strategies, local government and private sector shall formula programs
and recognize the following:
-

Investment in education and infrastructure are critical;

MSME sector is the backbone for economic growth. MSMEs can be supported through the identification
of partners and resources, creating channels for business access, and creating mechanism to
communicate their needs and to share information;
Existence of institutions of higher education can enable powerful global connections; and
Foreign investors can be effective development partners.

Sec. Gen Fraineza underscores the importance of focusing their investment promotion efforts on competitive
advantages.

He mentioned that 15 Regional Competitiveness Committee and Cities/ Municipality Competitiveness Index
(CMCI) have been established to foster a culture of measurement and management in LGUs.
A strong area brand should also be developed to deliver a unified message about their respective areas. LGUs
and private sector should be proactive in identifying investor leaders. They should also formulate program (e.g.
local advisory committees, workforce training, ecozone or financial incentives, etc.) that will facilitate the
provision of supportive resources and guidance and investment agreements. Specifically he suggests the
creation of One Stop Shop that will facilitate big ticket investment projects.
The investing area should allow investors to process regulatory requirements with ease, efficient processes.
Monitoring key performance indicators should be formulated by the LGUs and private sector to provide a clear
status of the investments being undertaken in the area.
LGUs and the business sector should be able to develop an effective trade strategy
Full scribe of his speech:
To our partners in government, colleagues in the private sector, good morning and thank you for inviting
me.
We congratulate the DILG and the Local Government Academy for coming up with this forum. I am
certain that results of the discussions here today will help create more local economies favourable to
investments and foreign trade and help sustain momentum for growth.
At this point, I would like to emphasize the importance of public- private partnerships. The mandate of
PCCI is to work with both national and local governments. I would like to note that PPP is not just all
about big ticket infrastructures projects. For us in the PCCS, PPP also means partnerships with both the
national and local governments to provide for a sound policy environment that will promote development
and inclusive growth.
For LGUs to become engines for inclusive growth and provider of major opportunities, require more
both local government and the private sector to work together and create an environment where citizens
see themselves as stakeholders. There should be ownership and obligation to contribute.
This need for partnerships has become more compelling with recent global trends such as free trade
areas and ASEAN integration.
The forthcoming integration will transform ASEAN into an integrated and single economy characterized
by and conducive to expanding markets, attracting investments, and promoting competition among
member economies through external economic relations and enhanced participation in the global supply
chain networks.
Together with a number of signed FTAs with trading partners like Japan, China, Korea, Australia- New
Zealand, and India, ASEAN Integration provides a platform of opportunities for Philippine firms or on the
other hand, encumber the country with liberalization obligations that could hinder the growth of SMEs
and domestic industries. It should be noted that, free trade arrangements will pressure not only firms but
also LGUs t enhance their competitiveness.
To reap the benefits of integration, the business sector need to work with LGUs to encourage more
businesses and industries to develop and sustain their participation in global value chains and
production networks; to improve their overall competitiveness and growth.

This enabled other countries to develop new and appropriate strategies and measures which allowed
them to compete effectively under charging trade landscapes.
Some insights on competitiveness
To be competitive, the business sector and LGUs should work on the premise that competition
is not with other LGUs but with other areas around the world.
The competition is worldwide, local government units have to appear on the international radar,
otherwise, nobody will ever know they exist. LGUs should not go into regional competition,
instead, pool their resources and jointly market their regional abroad.
An effective competitiveness strategy requires that local government and the private sector jointly
formulate programs which recognize the following:

Investments in the education and infrastructure are critical

MSME sector is the backbone for economic growth. It is important to support MSMEs by
identifying partners and resources. It also involves creating channels for business to access
these resources such as regional councils and partnerships with business; creating
mechanism to communicate their needs and to share information.
Existence of institutions of higher education can enable powerful global connections
Foreign investors can be effective development partners

LGUS and the private sector should focus their investment promotion efforts on specific sectors and
understand the needs of the sectors they wish to attract. Focus should be on competitive advantages to
promote complementation not competition with other areas.
In this regard, we would like to commend the efforts of the National Competitiveness Council for coming
up with the Cities/ Municipalities Competitiveness Index (CMCI). As you are aware of, the CMCI
measures competitiveness based on 3 major factors: economic dynamism, government efficiency and
infrastructure. As it has been said, in business, what gets measured gets managed.
To date, 15 Regional Competitiveness Committee and CMCI have been established to promote culture
of measurement and management of LGUs.
The result of the CMCI highlights not only the need for to develop competitive advantages, but also the
need to be competitive in specific areas which are closely examined by investors.
LGUs and the private sector should also work jointly in developing a strong area brand which focuses
on specific business opportunities in the area desirable to targeted investors. If stakeholders are not
unified, they will tend to deliver conflicting messages about the area and lose the interest of potential
investors.
LGUs and the private sector should be proactive in identifying investor leaders. Thses include setting up
of a panel of industry experts to tap their networks. This will add credibility when potential investors
have questions; establishment of business connections; participation in trade shows; connecting with
government agencies like the DFA, DTI and providing them their respective investment portfolios.
LGUs and the private sector also need to jointly formulate a program to facilitate the provision of
supportive resources and guidance and to facilitate investment agreements.

This program may include the creation of local advisory committees, programs to meet the needs of
potential investors such as workforce training, ecozone or financial incentives; help manage
expectations and understanding of business requirements and environment.
In this regard, we have proposed the creation of a one stop shop or an Investment Oversight and
Networking Body, to facilitate for instance, the entry of big- ticket investment projects. This requires the
Oversight Body to network with business organizations for the effective delivery of the envisioned
services.
Services to be provided prospective investors may include national and local government approvals,
permits, and clearances for compliance with health, safety, environmental and other regulatory
requirements. The whole idea is to make investing in your areas hassle free as possible and pave the
way for the smooth entry of bi investors.
LGUs and the private sector should jointly implement a program to monitor and provide aftercare. This
involves monitoring key performance indicators such as value of investment and number of jobs created
and should be reported regularly and shared with the public.
LGUs and the business sector in effect should be able to develop an effective trade strategy.
National government should also support LGUs that are investing, organizing and establishing linkages
with LGUs abroad to improve their competitive position.
LGUs sometimes lack the geographic scale, political and fiscal capacity and local standing to influence
broader policy debates on the capitalization on all available trade opportunities.
In closing, it is said that LGUs can be transformed by forging new and dynamic public- private
partnerships that create a new way of doing business; one that is evidence- driven, performancemeasured and technologically- enabled.
Partnerships give us cause for hope, and a game plan for winning the future. By working together, we
can deliver public services, put our house in order, and make our economy resilient through globally
competitive which is LGUs ready to seize opportunities.