Investors happy with President Aquino, but…
Foreign businessmen in the country are generally satisfied with the Aquino administration but want the government to implement major reforms, particularly in the area of the judiciary.
“We need to reform the judicial sector. Business harassment, or when competitors seek (temporary restraining orders), is a big issue for investors. The delay in getting certain issues to court is also a problem,” Canadian Chamber of Commerce of the Philippines president Julian Payne said in a briefing on Wednesday by the Joint Foreign Chambers (JFC).
The JFC is the umbrella organization of various foreign chambers of commerce in the country such as the US, Canada, Europe, Australia-New Zealand, Japan and South Korean chambers.
<strong>A lot to be desired</strong>
While generally satisfied with the accomplishments of the Aquino administration thus far, JFC said there was still a lot to be desired, as far as reforms are concerned.
“Reconsiderations are likewise big issues. The Supreme Court sometimes reconsider cases two to three times. There’s no certainty in the business environment. It’s like we can’t depend on written laws here. The courts have to be consistent in its decisions, regardless of the members (of these courts),” Payne added.
American Chamber of Commerce of the Philippines president Austen Chamberlain said the government should step up efforts in stamping out corruption, as this would take a long time to accomplish.
“Corruption starts at the top and ends at the top. We saw corruption from the top in the last administration. This administration has made it clear that corruption has to be reduced. We’ve already seen this going down already. But corruption will take a long time to eradicate. It will take years, and it has to start from the top,” he said.
<strong>Lesson from Indonesia</strong>
Amcham senior investment adviser John Forbes said the Philippines would do well to learn from the Indonesian government, which recently prosecuted 300-400 corruption cases in both the public and private sectors.
European Chamber of Commerce of the Philippine vice president for external affairs Henry Schumacher added that the government should start filing charges against the so-called “big fish” if it really wanted its anti-corruption drive to succeed.
“For tax evasion and smuggling cases, there has to be convictions. The (Department of Justice, Office of the Ombudsman, and the Supreme Court) should work together to get someone in jail: one whom people say will never go to jail,” he said in a separate interview.
Forbes also said that some foreign 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,” he 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 that President 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.
<strong>Poor policy</strong>
The Manila-based Asian Development Bank (ADB) said in a report released on Wednesday that the Philippines was being held back by bureaucracy and, 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 Mr. 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. <strong><em>With a report from AFP</strong></em>
