Centre on Regulation and Competition WORKING PAPER SERIES

INTRODUCTION This paper maps out the terrain of regulatory governance in the Philippines. It is made up of four interrelated parts. The first section gives a short introduction to the country so that the context of the regulatory governance system can be better understood. This overview also defines the concepts of regulation, competition and regulatory governance as they are used in the paper. The second part describes the constitutional and legal frameworks of regulation in the economy. In the process, it shows the contrasting pull of nationalism on the one hand, and globalisation and liberalisation on the other, as the most significant forces shaping regulatory governance today. The third part discusses the institutional framework. It first describes the role of the three branches of government. It then dwells at length on the various means of organizing the regulatory agencies, this time looking primarily at how they tackle the joint pressures of involvement and independence. It also presents emerging regulatory mechanisms from the private sector and civil society. Drawing from all these, the fourth part pulls together the lessons learned from the discussion and suggests items for the research agenda for the next years of the project. The Philippines is the world's second largest archipelago, comprised of 7,107 islands located in the Southeast Asian region. It has a total land area of approximately 300,000 square kilometres, subdivided into three main geographical areas: Luzon, Visayas and Mindanao. According to the country's latest census (2000), the total population is about 76.5 million with an estimated annual growth rate of 1.99 percent. The Philippines' economic system has evolved from the country's long experience of colonial rule. Following the Spanish conquest in 1521 fragmented native localities known as barangays were consolidated into a single political domain, and a unified economic system based on feudalism was established. The nearly four hundred years of Spanish colonisation was characterised by a mercantilist trading regime, initially limited to Chinese traders that supplied merchandise for the Manila-Acapulco galleon trade route. Towards the latter part of Spanish rule, the export agriculture strategy that shaped the existing agricultural regime in the country was implemented and the country was subsequently opened for trading to all nations. 2 With the American occupation at the advent of the 20 th century, the colony moved from mercantilism to a free enterprise system. An "economy of special relations" with the United States was established, focusing on export …