Headline hogging PH scares off European investors
Some multinational companies are postponing their expansion plans in the country due to the political uncertainty threatening their businesses, according to an official of a group representing European investors.
“As harsh as it sounds now, the Philippines is in the European headlines almost on a weekly basis. I don’t want to say that we appreciate those headlines, but it basically brings in a lot of questions,” said European Chamber of Commerce of the Philippines (ECCP) executive director Florian Gottein.
He said political controversies in the Duterte administration were turning off some members of the European business community, with one company even opting to expand elsewhere in the Asean region.
“I think it’s as series of statements over the last weeks and months which caused that decision. It’s basically uncertainty. Business can live with risk, but uncertainty is something difficult to plan.”
On the sidelines of a business forum, Gottein told reporters that two firms have disclosed their plans to the ECCP as early as the latter part of 2016. One firm is in the information technology industry, while another is in manufacturing.
This was around the time when President Duterte threw insults at members of the international community, including the European Union, which criticized the administration’s bloody war on drugs.
“They were thinking about doubling actually their investment, but the headquarters in Europe decided at that moment to put it on hold. There was another company that also wanted to double its investments, then decided to expand operations in Vietnam rather than in the country,” he disclosed, but refused to name the companies.
The expansion plans would have had added 5,000 more jobs in the country.
To recall, ECCP president Guenter Taus said late last year that the growing pile of bodies in the government’s war on drugs had created a sense of uncertainty among European investors.
The ongoing drug war, with the body count exceeding 7,000, is seen by some stakeholders as a distraction to an otherwise promising growth story of the Philippine economy.
Gottein said ECCP was already trying to pacify firms, telling them that the environment in the Philippines still offered a lot of opportunities.
Firms, however, were beginning to realize alternative options elsewhere in the Asean region.
The ECCP is set to hold the Asean-EU Business Summit here in the country next month.
The summit, which would be attended by EU Trade Commissioner Cecilia Malmström among other notable leaders, aims to strengthen ties between EU and the Asean and to support existing trade arrangements with the Philippines.
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