Business groups and the policy making process

Posted: April 10, 2010 in Philippine politics, Political institutions
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Business interests participate in the policymaking process in the Philippines usually to influence it in their favor.  Among the means at their disposal include business associations, lobbying, campaign finance contributions, personal and policy networks, and outright corruption.


Formal business associations have varying degrees of cohesion and potency as players in the policymaking process.  Older institutions like the Bankers’ Association of the Philippines (BAP) had been able to intervene in the process to promote industry interests.  The examples that come to mind include BAP’s interventions in the passage of the Bank Liberalization Law in 1994 (where it was able to limit the entry of foreign banks into domestic banking) as well as the passage of the National Internal Revenue Code of 1997 (which sought to reform taxation of individual and corporate incomes).


In the latter process, BAP successfully opposed (with the Bangko Sentral ng Pilipinas’ support) proposals to relax the bank deposit secrecy rule to allow tax authorities to examine the bank deposits of suspected tax cheats, and to lower the proposed withholding tax rates on interest income foreign currency deposits with local banks.


Newer business institutions like the Makati Business Club (MBC) have gotten involved in more than purely business issues and concerns.  As a consequence, the MBC got split when its leadership decided to support oust-GMA campaigns in 2005.  Businessmen’s dialogues with government are usual and regular mechanisms utilized to solicit business’ inputs and comments on government policy proposals.  In addition, there are formal venues where business interests are openly incorporated in government decision-making.  The Legislative-Executive Development Advisory Council (LEDAC) was created by law to facilitate executive-legislative relations.  The LEDAC law provides for the inclusion of a private sector representative in the advisory body.  At one point, MBC secretary general Guillermo Luz served in that capacity in the LEDAC.

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