Peace and order situation worries foreign investors

Foreign business groups based here in the country have raised reservations regarding the local peace and order situation, warning that overseas tourists and investors might be more hesitant in engaging the Philippines under an uncertain political climate.

During the pre-event press conference for next month’s Arangkada Philippines Forum, foreign business leaders reiterated their concerns on the political climate of the country, blurring the line authorities previously drew to delineate economics from politics.

The business leaders did not make any specific mention of certain developments in the current peace and order situation. However, this comes amid the martial law in Mindanao and the mounting deaths arising from the government’s intensified war on illegal drugs, the latest casualty of which was 17-year-old Kian delos Santos.

Asked to comment on the domestic peace and order situation, European Chamber of Commerce of the Philippines (ECCP) president Guenter Taus said that business decisions were more difficult to make when the investors see the Philippines from outside looking in, especially given how negative the country was being framed in international media.

“If you look from the outside in, if I were an investor from Europe or anywhere else and I want to put up a factory, and I have $500 million, would I really want to put this in a country with issues on peace and order?” he asked.

“I think the answer is I would do very hesitantly so because you don’t understand what’s coming your way. The more you see Asean (Association of Southeast Asian Nations) integration, the more it becomes vital for the Philippines to show that we are the destination of choice because we have competition,” he said.

This, however, is not the ultimate deciding factor for businesses that would want to set up shop in the country, according to Bruce Winton, president of the American Chamber of Commerce of the Philippines.

“Obviously, making a business investment is a huge decision. It entails a lot of research. You won’t just look at the headline and news,” he said during the press briefing.

Winton, who is cluster general manager for Mariott International hotels in Manila and Iloilo, said that tourists, on the other hand, did not observe the same level of meticulous research compared to investors.

“For a tourist making a vacation choice, you’re not going to do that level of research. They are just going to look at the headlines,” he said.

But in spite of these concerns, tourist arrivals are still growing, data from the Department of Tourism would suggest. Arrivals from foreign tourists grew 12.73 percent in the first half of the year to 3.36 million visitors from 2.98 million visitors in the same period in 2016.

South Korea remained the top market for foreign tourists, with more than 795,000 visitors arriving in the country from January to June, accounting for more than 23 percent of the total share of tourist arrivals.

“This is one thing [that is] very interesting to me. What I think is that the Philippines is safer than Korea. Korean tourists seem to think like that when you think about the Korean Peninsula issue,” said Ho Ik Lee, president of the Korean Chamber of Commerce Philippines (KCCP), referring to the threat of nuclear missile strikes from North Korea.

On top of this, ECCP’ Taus said the Duterte administration has either “addressed equally or equally unaddressed” the seven “big winner” sectors listed by the Joint Foreign Chambers (JFC) of the Philippines more than half a decade ago.

In 2010, the JFC published an advocacy paper called Arangkada Philippines 2010: A Business Perspective, which was a result of focus group discussions among top business leaders across seven sectors with high growth potential, namely agribusiness, business process management, creative industries, infrastructure, manufacturing and logistics, mining and tourism.

More than a year has passed since President Duterte took office, but business leaders in yesterday’s forum emphasized that more was needed to be done in each of the seven sectors.

The BPM sector, some tax perks of which are being threatened to be removed under the government’s comprehensive tax reform program, was one of the constant concerns among leaders when asked which of the seven sectors needed more attention from the government.

“It appears that the President is very hesitant to continue signing those contracts, which is very contradictory to growth, especially when you look at the BPO (business process outsourcing) industry. In my opinion, the BPO industry has, without a shadow of a doubt, enabled a middle class to rise. Why do we not support that?” Taus said.