The Philippines, which is hard-pressed to corner more foreign direct investments, is set to get a $1-million grant from the Japanese government to improve its investment climate.
The grant will be administered by the Asian Development Bank, which cited the lingering need of the Philippines to provide jobs to its people.
Under the terms of the grant prepared by the ADB, the Philippine government will provide a counterpart fund of $200,000.
The grant will be used to fund training programs on how to make it easier for enterprises to set up businesses in the Philippines.
These include simplification of business registration requirements, streamlining of processes in concerned government agencies, and setup of regular assessment programs on the business-friendliness of line agencies.
The activities to be funded by the technical assistance will fall under three categories: competition policy and regulatory efficiency, policies to reduce costs of doing business, and employment generation.
In a report on the approval by the ADB and the Japanese government of the grant, ADB said “the investment climate [in the Philippines] needs to undergo deeper reform.”
“The investment climate should be viewed more broadly to include an enabling environment where businesses can operate competitively,” ADB added.
The multilateral institution also said that the country needs to invest more heavily in human capital so that the workforce will have the skills to match the requirements of employers, thus contributing to growth.
The Philippines can grow by about 5 percent every year, ADB said.
While the growth is decent, ADB said it was not enough to significantly reduce unemployment and poverty incidence. Given this backdrop, the foreign development lender said, the Philippines should entice more investors.
Currently, investments in the Philippines are equivalent to only about 15 percent of the country’s gross domestic product (GDP). This figure is anemic compared with the 24 percent recorded in the mid-1990s, prior to the Asian financial crisis.