In a workshop on foreign direct investments, the Joint Foreign Chambers of the Philippines concluded that consistency in policies, including its contractual agreements with the private sector, is critical in attracting more foreign investments into the country.
According to the foreign chambers, the government needs to make a clear and firm commitment to uphold the sanctity of awarded contracts, especially in big-ticket infrastructure and utility projects.
Foreign investors have been burned by several controversial contracts that were awarded to various consortia but ultimately abrogated or rescinded.
The World Bank supported this view in its presentation before the joint foreign chambers, saying that while higher investment is eminently achievable and structural environment is already good, "consistent implementation with integrity" is critical.
World Bank country director Joachim von Amsberg said there are at least five sectors that can be quickly set up as FDI hosts, namely infrastructure, mining, information technology, privatization-led projects and the financial sectors.
According to a report developed by the joint chambers, however, the government needs to sort out a transparent, competitive awarding process that will ensure the best terms for all parties concerned and where the viability of the project is assumed as a given.
Right of way (ROW) acquisition should be a government priority, matched by public funds to support the project since this often bogs down infrastructure projects at the preparation level.
Von Amsberg added that sector-specific policies needed action, beginning with the independent and fact-driven setting and administration of regulations in infrastructure projects.
In the minerals sector, Von Amsberg said the government needs to enforce implementing rules and regulations to manage environmental risks while in the IT sector, there should be support in massive public and private investments to increase the capacity to produce skilled personnel.
The financial sector, on the other hand, requires a steady progress in the implementation of risk-based capital adequacy guidelines while further liberalizing foreign entry into the financial services sector.
"The sector also needs a more efficient policy regime for mergers, acquisitions and liquidations," von Amsberg said.
Earlier, the foreign chambers estimated that potential foreign direct investments into the Philippines could reach up to $8.5 billion a year over the next four years.
The foreign chambers of commerce led by the American Chamber of Commerce and Industry (AmCham) said the country could attract foreign direct investments of up to $34 billion over the next four years.