DAVAO CITY?In a rare display of candor, the government?s main economic policy-maker yesterday said state regulatory agencies have been ?captured? by big business and working largely to benefit the latter instead of protecting the interest of the people.

?That?s the problem. The interests of business have been very influential with the regulators,? said Economic Planning Secretary Romulo Neri.

This is why people pay higher prices for goods and services offered by businesses that are supposed to be regulated by these state agencies, he said.

?The people are losing because they have to pay higher prices,? said Neri who heads the National Economic and Development Authority.

Neri cited as one example two crucial service sectors, the ports and airlines, which government has been trying to de-monopolize for years to introduce more competition and bring down transport costs.

The poor state and management of the country?s port facilities has been largely blamed for the inefficient movement of goods and passengers and for the high production costs in the country.

The Neda chief said the cost of handling cargo in Philippine ports was very high, resulting in higher prices being paid by consumers.

This is because high transport costs?much of it port-related?of agriculture, fishery and manufactured goods are eventually passed on to end-users, he said.

The Philippine Ports Authority, the government agency responsible for developing terminals, facilities and services in the country?s ports, needed to be reformed, he said.

Monopolistic

The job of loading and unloading merchandise in the country?s piers and wharves is done by a few private arrastre companies. Neri said a revamp of the PPA would correct this monopolistic scheme.

As many critics have pointed out, the PPA?s regulatory function has to be separated from its function as the owner of the country?s ports.

Another case is air travel which despite the regulatory presence of the Civil Aeronautics Board (CAB), has remained prohibitive for most Filipinos, said Neri.

The CAB is the agency that regulates, promotes and develops the economic aspects of civil aviation. It is responsible for approving air services agreements with foreign carriers.

Though the country has adopted a partial ?open skies? policy?opening up certain airports like Clark to more foreign airlines?this has not done anything to bring down the cost of air travel, said Neri.

Liberalize airlines

?It?s not effective. We would be better off liberalizing [the entire airline industry]? that way you bring in more tourists,? he said.

Liberalizing the airline industry would mean CAB would have to be freer about parceling out air rights, thus allowing more airlines to operate here. Such a move would considerably bring down the cost of air travel.

Neri called on the state regulatory agencies to ?change their outlook and attitudes.?

He said he was making this criticism of the regulatory agencies so ?that people will be aware that there is such a thing as ?regulatory captives.??

This will also make these agencies know that they are being watched, he said. Dennis Jay C. Santos, Inquirer Mindanao