Breaktime: Full courting press
The Aquino (Part II) administration is running after the multibillion-dollar investments of a gigantic automotive company, apparently to persuade it to locate its Asean factory in the Philippines.
The investments can easily exceed $10 billion.
To get an idea of the impact of such an investment on the image of the administration, you may consider that, in the whole of 2013, the Philippines posted foreign direct investments (FDI) of slightly less than $4 billion—the lowest among the original members of the Association of Southeast Asian Nations (Asean), beaten even by the $9 billion in FDI recorded by latecomer Vietnam.
From what I gathered, anyway, the administration actually sounded off the car company on its desire for the Philippines to host the fully integrated plant some time ago—or more than a year ago by one estimate.
One source pointed out that the “first meeting” took place during one of the official visits of our leader, Benigno Simeon (a.k.a. BS), to the company’s home country sometime in 2013.
Since then, the boys of our leader, BS, went on a full-court press to defend the plan against other interested Asean members.
Obviously our leader, BS, must be involved—personally —in one of the most fervent corporate investment courtships known to mankind during the Aquino (Part II) administration.
For despite his pronouncement in one trifling television interview with a celebrity TV talk show host that he is not courting anyone, our leader, BS, is indeed involved in a serious courtship.
Well, if the investment of the foreign car company materializes before 2016, it would be the biggest business coup of our leader, BS, during his six-year term.
And so, no wonder, at least from what I gathered, the administration prefers to keep the chase of the foreign car company by our leader, BS, a “top secret.”
Still, the car company that the administration targets in its “hush-hush” hot pursuit happens to belong to a highly diversified conglomerate, meaning, the group has other interests in the Philippines other than just the automotive sector.
It is therefore possible that the Aquino (Part II) administration is offering the car company some sort of an investment “package,” which may include other deals, such as some infrastructure projects or some ventures in other sectors such as mining.
In a way, the “package” can perhaps sweeten the deal being pushed by the Aquino (Part II) administration to the giant car manufacturer.
Apparently, the administration feels that the huge Philippine market with its population of 100 million is not enough attraction for such a huge once-in-a-lifetime investment opportunity.
You see, in the 1990s, the administration of President Fidel V. Ramos—otherwise known as “Kuya Eddie”—also tried to convince one big US company to locate its Asean car manufacturing plant in the Philippines.
Despite all the sweeteners thrown by the administration of Kuya Eddie into the investment cup, the US car maker eventually decided to go to Thailand.
What makes the investment conditions in the Philippines different today under the Aquino (Part II) administration from those under the administration of Kuya Eddie?
Well, basically, the country’s infrastructure situation turned worse! As it is, at least according to papers presented by various business organizations to the administration, the infrastructure here remains a deterrent to FDIs, particularly in manufacturing.
And official figures can bear out the claims of the business community. Sure, the FDI during the past four years of the Aquino (Part II) administration continued to improve, from a mere $1 billion in 2010 to about $3.7 billion in 2013, which was already the highest FDI reported in the country in the time of our leader, BS.
The sad fact remains that the FDI flowing into the Asean amounted to some $120 billion in 2013, meaning, that the $3.7 billion in FDI posted by the Philippines that year was only about 3 percent of the entire amount recorded by Asean members.
Alongside the original Asean members, the Philippine FDI record would seem laughable, because Singapore obtained $60 billion in FDI that year; Indonesia, $18 billion; Thailand, $13 billion, and Malaysia, $12 billion.
Look, boss, even the up-and-coming Vietnam posted almost three—again, “three”—times our FDI with more than $9 billion in 2013.
Now, the propaganda line of Malacañang has always been that the business climate in the country kept on improving during the time of our leader, BS.
Just last week, for instance, an unknown “text brigade” suggested precisely such a propaganda line in its text blast, pointing to the headline in one of the major dailies (not the Inquirer), saying that the Philippines was in the list of “best nations for doing business.”
It turned out that the list ranked Philippines No. 82 out of 146 countries in 2014, and, yes, indeed, the country climbed from the 90th spot. Still, in terms of “investor protection,” the country got buried to 124th place in the list.
Now, the World Bank also does a yearly serious study of some 189 countries to serve as an index called “ease of doing business.” In the latest study, the Philippines was at 95th place out of 189 countries, and we actually beat Indonesia, which landed at 114th place.
Yet the FDIs in Indonesia still came up to about $18 billion in 2013 versus the $4 billion in FDI in the Philippines. Why?
Our contacts in the business community suggest that the biggest attraction to FDIs has, and will always be, been the infrastructure of any country.
It is obvious that the Aquino (Part II) administration—which spent hundreds of billions of pesos in a dole-out program called CCT, not to mention its diversion of more P200 billion in budgeted funds under the discredited DAP—neglected infrastructure, which is the priority of the government in any country.
Well, this country now suffers from the debilitating port congestion, and its citizenry must bear monstrous traffic jams and ill-maintained light rail systems. By the way, bad traffic also happens in the air and not just on land. Airline flights are often delayed due to the long wait for landing space at Manila airports.
To think, the Aquino (Part II) administration already received proposals from the private sectors for the construction of brand-new airports, covering both modern terminals and much wider and longer four-lane runways.
The administration of course is sitting on the proposals.
To think, those proposals could translate to billions of pesos in investments, if only the administration would dare to act on them.
As it was, the Philippines posted investments in 2013 at only 19.7 percent of its GDP—which, again, was the lowest among the original Asean members. The investments-to-GDP ratio in Indonesia came up to 33 percent; Thailand, 27 percent, and in Malaysia, 24 percent.
Truly, to polish its poor record in attracting investments, the Aquino (Part II) administration needs that one major coup to bag the major investment of the foreign car company. In short, pogi points!
