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Foreign business still cool on Philippines

Media also blamed for putting emphasis on bad news

A year into President Aquino’s term, foreign investors are still not keen on putting their money in the Philippines because of unstable laws and policies, among others.

MANILA, Philippines—Foreign investors remain reluctant to put money on the Philippines despite reforms by President Benigno Aquino, locally based western and Asian business leaders said Wednesday.

A year into Aquino’s six-year term, the US, Europe, Australia-New Zealand, Japan and South Korean chambers said investors wanted stronger assurances that laws and policies were stable.

The comments came as the Asian Development Bank (ADB) said the country still suffered from red tape, weak rule of law and unpredictable policies, all of which were holding back foreign investment.

John Forbes, senior investment adviser at the American chamber, suggested some firms were holding back amid concerns that rules will change mid-stream, especially when a new president takes over.

“I don’t see foreign investors coming in fast enough,” Forbes told a press forum.

The central bank said foreign investment inflows to the Philippines in the four months to April fell 15 percent to $552 million and the chambers suggested this was dwarfed by capital flows to many of its neighbors.

Sean Georget, executive director of the Canadian Chamber, said the press shared part of the blame.

“It’s a huge task to change public perspective. Much of the media only focuses on bad news. What gets reported is mostly negative stories,” Georget said.

The foreign business leaders agreed Aquino had started on a positive note with a strong anti-corruption campaign and a scheme to attract private investment to build crumbling infrastructure.

But investment in roads, bridges and airports, as well as mining, takes years to pay off, meaning it is important that policies last after Aquino steps down in five years, they said.

The Manila-based ADB said in a report released Wednesday that the Philippines was being held back by bureaucracy, poor policy and an apparent lack of a rule of law.

It also cited high labor and power costs, poor infrastructure and a high cost of doing business.

Although Aquino plans to use private investment for infrastructure, the ADB report said the Philippines lagged behind in this area as well.

“Everything is available on paper but in reality, is lacking. Processes are not transparent, not competitive, and not robustly prepared,” the report said.

World Bank figures showed that foreign direct investment in the Philippines in 2009 was only $1.95 billion compared with $7.6 billion in Vietnam and $4.98 billion in Thailand.

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Tags: Business , Construction , foreign investors , Investments , Philippines , politics , SONA 2011

  • http://joboni96.myopenid.com/ joboni96

    G O O D

    para ang pilipino ang magnegosyo at

    makinabang dito sa ekonomiya natin

    pres noy gumawa ka ng overseas pilipinos bonds and equities program

    kung saan pwedeng mag invest ang milyong milyon nating ofw

    to fund crucial industries – energy, mining, banking, agri/food, mineral processing, transport, etc.

    and have better returns

    than in deposits in

    foreigner-controlled big banks

  • http://www.facebook.com/ramfels Ramfel Huggins

    have to change the SYSTEM OF GOVERMENT.  It is due time that the country will look on the Parliamentary system as most progressive nations have.  This system of government is tested and proven already

  • http://twitter.com/voiceofajm Joseph Magat Magtoto

    Madaming magandang pagbabago na ang ginawa ng pangulo at pamahalaan…di sya perfect pero bilib ako sa mga changes na ngyayari…ang HINIHINTAY KO NA LANG NA MAGBAGO AY ANG MGA PANGKARANIWANG PILIPINO NA KAGAYA KO AT KAGAMO NA NAKAKABASA NITO… tignan mo ang sarili mo at meron kang pedeng baguhin sa sarili mo para sa ating bayan

    • Anonymous

      madaming nagawa na si PNoy. pero kulang pa rin dahil malapit na tayong maunahan ng Vietnam. ang mga malalaking kumpanya umaalis na at lumilipat.

      people can do but to a certain extent only. it is the government that should ENABLE and EMPOWER the people to do more. for example, we need sheriffs but how can sheriffs be confident to carry out their job if the government could not protect them from bullying warlords. you and i can not protect sheriffs from the warlords but a decent government can.

  • http://twitter.com/CigarRoadie Ronnie Cruz

    I’m afraid, Noynoy is her Mother’s son.  Parehas magisip, parehas magpatakbo.  Di bale walang ginawa, wag lang masabing corrupt.  Kung yung nanay niya had too much hard on against the Marcoses, si Noynoy naman, laging kay GMA naktuon ang pansin.  Bawat kilos, “e kasi si GMA may kasalanan”.

    You can all say what you want against GMA and to some extent Marcos, at least they had us on the right track.

    • Anonymous

      It’s your freedom to say that even Marcos had RP on the right track. But, let met tell you something. I had the experience of seeing RP years before martial law and things were very different during those days. RP was second to Japan in economic prosperity, middle class were rising in numbers, corruption in government, military, police and private sector was minimal. Manila police was dubbed as Manila’s finest. When martial law was declared everything changed, there was no check and balances, media was restricted, military and police learned to abuse their powers, middle class shrinked, small businessess went up in smoke due to crony capitalism, people learned to embrace graft and corruption, national debt escalated and effects of martial law are still in our midst even to these days. How could you say Marcos, even to some extent, had RP on the right track.

  • Anonymous

    Passing of the Freedom Of Information law alone will give a tremendous boost to attracting foreign investors. It will provide transparency, predictability, and level playing field. However, transparency is what most of our officials are afraid of. Alam naman natin lahat ang tunay na dahilan. Magkakabukuhan! Sisingaw bigla ang mga baho. Maraming makukulong kung susundin ang batas.

  • Anonymous

    how would the foreign companies consider the Philippines when much of our government’s time and resources are wasted on divisive issues and issues that does not directly contribute to our economy and our capability to host foreign companies? Nasaan na yung sinasabi nilang scorecards? Ano na ba ang score vs. target pagdating sa ekonomiya natin?

  • http://profiles.yahoo.com/u/S42XIXNLXWDSOTMCWNUB6CRGQU DoDong

    kakatuwa ung picture ni PENOY dito.. tingnan nyo na lang kasi ung picture na yan .. kung ikaw dayuhan at  me pera .. pipiliin mo ba ang pilipinas paglagakan ng iyong salapi kung ganyan ang presidente ng bansa.. 

    • Anonymous

      Dodong,Do you have anything in mind kabayan that you think can be of help? if we will read the article above,clearly you are part of the problem,would it be far better if we just think positively than doing the same old story…..blame game? I know we can do better than this. 

  • Anonymous

    how can you possibly expect foreigners to invest when even a sheriff can get beat up by a mayor and the government could not impose a deserved penalty? how would you think the foreign ambassadors and CEOs consider us?…uncivilized?…talaga namang weak rule of law.

  • Anonymous

    “Everything is available on paper but in reality, is lacking. Processes are not transparent, not competitive, and not robustly prepared,”

    HIGH TIME TO PASS FOI – Freedom of Information Bill to deter corruption,establish transparency & efficiency. PNOY please put your money where your mouth is and prioritize this bill! Politicians against this bill are undoubtedly corrupt or have vested interest!

    • Anonymous

      I think that to “the powers that be”, the FOI is a “double-edge-sword”. They are afraid of it. Kasi marami din sa kanila ang matataga niyan. The FOI not being the no. 1 priority is a glaring contradiction to PNoy’s anti-corruption campaign. Siguro alam niya na marami sa mga kapartido niya at mga kaibigan ay mabubuko.

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