"The uncertainties in the country are prompting foreign investors to just wait for the outcome of next year’s elections because if there’s anything business doesn’t like, it’s the uncertainty," said Robert Sears, executive director of the American Chamber of Commerce of the Philippines (AmCham).
Sears said the perceived unstable economic and political situation in the Philippines has foreign investors thinking many times over whether they can plan and operate their business in the country on a long-term basis.
At the same time, investors are awaiting reforms in critical sectors such as the power and mining sectors which have the potential to lure in new investors.
Sears said investors in the energy sector are awaiting the passage of a franchise bill that would pave the way for the sale of the National Transmission Co. (Transco).
On the other hand, foreign mining companies want the Supreme Court to resolve the Constitutional challenge to the Philippine‚ Mining Act of 1995 (PMA 1995) and the Indigenuous Peoples Rights Act (IPRA) which have kept away investors.
Those opposing the PMA 1995 fear that the country’s mineral resources will be solely benefiting foreign mining companies if given full stewardship of mining concessions while advocates of the IPRA said indigenuous tribes‚ ancestral lands should not be covered by the new mining law.
"There are many other sectors that continue to American traders be restricted," noted Sears. He cited the Philippine government’s reluctance to liberalize the air transport industry.
Amcham is urging the government to liberalize the air transport industry.
"Amcham believes that adopting an open skies policy will benefit Filipino consumers. An expanded cargo and passenger flight will be beneficial for the American and Filipino carriers, this will lead to increased flights for business travelers, tourists, overseas workers, shippers, exporters and the overall economy," said Sears.
Amcham has been urging Philippine Congress to act on long-pending reform bills that will improve the business environment in the country.
One of these is House Bill 12564 which calls for the exemption from the documentary stamp tax of secondary transaction of debt instruments.
HB 12564 was passed on third reading by the House of Representatives last February and is still awaiting the passage of its counterpart bill in the Senate. Sears said the chamber was hopeful that the bill could become a law this year.
"As the lawmaking process goes, if the bills are not passed into law before the 12th Congress ends, they will have to navigate the same legislative process all over again," said Sears.
He said the passage of HB 12564 will lead to the development of a bond market in the Philippines that has proven to be an important source of financing for infrastructure.
"This will also improve the conduct of doing business in the Philippines and would send positive signals among foreign investors," Sears added.
Amcham is composed of more than 700 multinational and Filipino companies who are among the country’s biggest investors.