MANILA, Philippines - Foreign businessmen said they expect the Philippine economy to grow by seven percent to eight percent this year because of renewed investment confidence.
In a press conference, American Chamber of Commerce in the Philippines (AmCham) executive director Robert Sears said that the new administration has sparked renewed interest in the country although actual investments may come in next year.
He noted that there is real interest in the Philippines but concrete evidence of change must be seen before multinational firms decide to infuse money into the country.
Sears said that there will be renewed interest in the Philippines especially from US-based firms after President Aquino visits the United States in September. “The US visit is good for US-Philippines trade relations. Americans are looking at the Philippines once again.”
For his part, John D. Forbes, AmCham Legislative Committee Chair said that multinational firms are looking at the cost of doing business. He noted that regionalization and international partnerships have made it possible for firms to produce products in one location.
According to Forbes, the removal of tariff barriers has made it easier for firms to produce in one country only because there is minimal tax for imported goods.
“Multinational firms are now consolidating their operations and as a result some factories may be closed,” Forbes noted.
He said businessmen are looking at three things before opting to invest further in the country. These are the incentives given by the government, the high cost of electricity here and the exorbitant minimum wage in the Philippines.
The minimum wage in the Philippines is the highest when compared to its South East Asian neighbors . It is six times higher than the minimum wage in Vietnam. Worse, the Philippines has twice as many paid holidays when compared to other ASEAN countries, Forbes said.
The World Competitiveness Yearbook (WCY) showed that business executives in the Philippines are among the most insecure that their investments here will transfer to other countries.
The WCY survey was done in 56 countries wherein the Philippines ranked 53 in the relocation threat of production category.
“Our business executives are most insecure that their production facility will relocate to other countries,” Asian Institute of Management (AIM) Policy Center Executive Director Lourdes A. Sereno said. “We are not attracting new investments and whatever businesses that remain are threatening to leave,” she noted.
Sereno said that this is a serious concern because business executives in the country are very insecure that local operations will not continue.