POLICIES AND REGULATIONS

EXTERNAL ANALYSIS

POLICIES AND REGULATIONS

Business enterprises operate within the policies, laws, rules and regulations set by the government. As such, business enterprises have to consider the legal aspects of running a business. Such common legal requirements include business registration, permits and licenses, payment of fees, environmental clearance certificates and payment of taxes. Others are more business-specific such as BFAD clearance for drugs and food manufacturing; pollution controls for such industries like breweries, alcohol derivatives, oil repacking and other related chemical industries. Importation of agricultural products which affect local production such as rice, corn, meat and poultry do have implications on raw materials for the food processing industry.

While there is not much import controls, procedures may hamper acquisition of imported raw materials. Those that are involved in jewelry manufacturing, policies on precious metals and stones, could find restrictions on importation of these materials. Similarly, those involved in the retail of gasoline products, basic commodities may find pressures in their selling prices.

The government's participation in world organizations such as ASEAN, WTO and others paves the way for opening the country's business economy to global competition.

The effects of these policies, rules and regulations put pressure to local enterprises. Competition would be more intense thus forcing local enterprises to be more price and quality-competitive. Similarly, laws on environment would require enterprises to install anti-pollution devices and other environment control devices that could add up to operating costs.

While most of rules and regulations are mostly added costs, there are also positive aspects that these laws create. Some of these are financial and non-financial incentives given to enterprises. These include privileges such us tax holidays, tax exemptions and others for BOI registered companies, economic zone locators and other special government projects.

The aforementioned effects of government policies, rules and regulations have effects on the enterprise. It is therefore important for the enterprise to know these and be aware on how it will affect business.

The following guide questions could provide the policy and legal environment aspects concerning the enterprise:

What are the local ordinances and programs that affect your business and to what extent ?

in terms of business start-up (formation, registration, location, zoning, permits, etc.

in terms of local taxation

in terms local assistance (business promotions, incentives

in terms of environmental controls

What are the national policies and programs that affect your business and to what extent ?

in terms of business start-up (registration, location, zoning, permits, etc.)

in terms of income taxation

in terms of assistance (business promotions, incentives)

in terms of environmental controls

currency policy

import restrictions

export incentives

What are the current policy and legal issues that might affect your business ? How will they affect your business ?

To what extent will these affect your business ?

What future policy and legal issues do you see that will greatly affect your business ?

What are your alternatives should these policy and legal issues be adopted ?