Asian financial firms eager to enter local mart

Financial institutions from Korea, Indonesia, Malaysia, Taiwan, Singapore and Japan are interested to put up branches in the country and offer their full range of services, if and when the Philippine government decides to further liberalize the banking sector.

Trade Undersecretary Ponciano C. Manalo Jr. disclosed that they have received expressions of interest from foreign banks, who all want to participate in the Philippine banking system.

“They’re asking how they can fully operate in the Philippines. The secretary [of the Department of Trade and Industry] committed to these banks that he will talk to the Bangko Sentral ng Pilipinas to confirm the agency’s support to extend the list of those that can have a full banking license,” Manalo explained. “We’d like to give them opportunity to participate in the Philippines.”

The trade official explained that these interests are highly beneficial for  the country as these banks could help facilitate the entry of more foreign companies and more foreign investments in the Philippines, specifically in the manufacturing sector.

Manalo noted that these banks are keen to be part of the local banking system given the ease of doing business in the Philippines, good governance and greater transparency, all of which help assure investors of a stable, conducive business environment.

The investment grade ratings that the Philippines received last year from credit rating agencies such as Moody’s, Fitch Ratings and Standard and Poors have also contributed to this.

Most recently, a French credit body named the Philippines as among the most attractive emerging economies for investors. The Compagnie Française d’Assurance pour le Commerce Extérieur (Coface) cited the Philippines as a country with high growth potential and the most favorable prospect of increasing production capacity in the years to come. The other emerging economies were Peru, Indonesia, Colombia and Sri Lanka, which replaced Brazil, Russia, India, China and South Africa.

“This means that funds not normally available to the country, are now available to us, which increases the amount of investments that can be sourced locally. It means that funding is available and that capital formation is huge,” Manalo explained.

“Overall, investors see the country’s momentum. They now see the Philippines as a credible alternative place for investment, or a place to invest their money. Other Asean countries have issues that are not present in the country, which thus makes it comfortable to invest in the Philippines,” he added.

“Investors are beginning to understand how good things are going in the Philippines. They realize the opportunity— the country’s 100-million population and how the Philippines can serve as a gateway to a 500-million Asean market,” he added. “They see the country’s economic development that leads to infrastructure development; our real estate sector is booming; and we have a big BPO industry. There are many opportunities as well in agriculture.”

On another development, Manalo also disclosed that Korean firms are eyeing investment opportunities in the country’s energy, construction, data analytics, IT-BPM, banking and tourism sectors, among others.

During his recent trip to Korea, companies have also raised a number of issues relating to the cost of doing business in the country, including the high electricity rates and the restrictions provided by the Foreign Investment Negative List (FINL), Manalo added.