Philippines reaps $15M for investment in coco trade

NEW YORK—President Benigno Aquino III on Monday received an unexpected $15-million investment pledge in the Philippine coconut industry in the next four years following meetings with business groups, officials said.

A stream of American executives called on Mr. Aquino in his hotel, expressing enthusiasm in his efforts to create a new business environment and offering to expand investments in the country, according to Communications Secretary Ricky Carandang.

Among the callers were representatives of the US giant Pepsi Corporation, the US beverage company Vita Coco and its local affiliate Fiesta Coco Equity, and outsourcing firms Convergys and EXL Services.

Carandang said that the President was in “good spirits” after the beverage company executives told him about the huge global market for coconut water and its touted medicinal values for the health-conscious consumers.

“These companies want to source the demand for coconut water from the Philippines. So this is a big opportunity for our coconut industry and for our farmers,” Carandang said.

PepsiCo did not say how much it plans to invest in the country but it was serious in its plan to expand its coconut harvesting operations, he said.

Coconut rebirth

Vita and Fiesta officials told Mr. Aquino they planned to invest $15 million over the next four years not only to harvest coconut water but also in planting more coconut trees, Carandang said.

“There’s a lot of room to bring rebirth to the industry in general,” Vita CEO Michael Kirben told reporters later.

“We expressed a lot of interest in the planting of coconut trees to revive the coconut industry because we noticed that a lot of the trees are senile,” said  Fiesta president Romeo Chan.

Jeffrey Fox, president and CEO of Convergys Corp., said that he confirmed to Mr. Aquino his company’s “long-term commitment to invest in the Philippines.”

Bill Bloom, executive vice president of EXL Services, whose clients include Global 1000 companies, said his firm had chosen the Philippines as one of its “model centers.”

“That would include work that is typically provided to physicians, nurses or lawyers or accountants and we’re building models such that we can offer those services to our clients here in the US from our centers in the Philippines,” Bloom said.

Credit upgrade

Carandang also said the economic team was seeking a meeting with the credit rating agencies to “make a case that our fiscal management right now probably deserves a second look as far as ratings are concerned.”

Some of the economic managers will stay behind after the President departs on Wednesday to work for a review of the country’s sovereign credit rating that was believed to be underrated by two to three notches, he said.

In a speech before the US Chamber of Commerce, US-Asean Business Council and Philippine-American Chambers of Commerce at the Peninsula hotel, Mr. Aquino said there was “much reason to be optimistic” about the country’s future.

“Government’s fiscal management has improved to the point where we have been able to increase spending in vital social services and national defense without raising taxes this year,” he said.

Prudent spending and vigilance against corruption have resulted in savings which have been channeled to education, health and poverty alleviation, the President said.

4 ratings upgrade

This prudent spending has prompted government critics to “accuse us of not spending the public funds enough,” Mr. Aquino said, referring to fears that this policy could result in the government failing to meet its growth target this year.

“We are now seeing the results of a government working doubly hard, not just to improve the overall business environment but more importantly to advance the lives of its people,” the President said.

He said that since he took office, the country had gotten four positive rating actions in over a little more than a year, a big difference from the one upgrade and six downgrades during the almost 10 years of the previous Arroyo presidency.

The Philippines was ranked 75th in the World Economic Forum’s 2011-2012 Competitiveness report which Mr. Aquino said was “a full ten notches above our ranking in the previous report.”

He said that his administration is committed to level the playing field as it rebuilds its institutions, “especially those crucial to my pledge of curbing corruption.”

On Wednesday, Mr. Aquino is scheduled to address the joint meeting of the International Monetary Fund and the World Bank in Washington, where he will outline his administration’s development agenda. With a report from Michelle V. Remo