Good reviews fail to attract investments

We have been getting even more good reviews of how great our economy is doing. The latest one is from Huffington Post entitled: Is the Philippines the next tiger economy? Oh well… how I wish that will be so.

I hope P-Noy is also starting to wonder how come all these good reviews have so far failed to bring in the volume of Foreign Direct Investments (FDI) we so badly need. There must be something we still are doing wrong or all those good reviews are mere puffery.

I googled FDI and was directed to a Vietnamese website, vietnamnet.vn, which had an article on FDI dated Nov. 1, 2012. It really made me wonder even more what is happening to us. I also felt sorry for ourselves.

According to the story, “FDI to Vietnam reached its peak in 2008, when Vietnam attracted a record high registered capital of $71.7 billion. In 2009, the FDI flow dropped sharply to $23 billion, just equal to 30 percent of that in the previous year.

“The downward trend continued when the registered FDI capital reduced to $20 billion in 2010 and then to $15.6 billion in 2011. Meanwhile, Do Nhat Hoang, head of the Foreign Investment Agency, has warned that the FDI registered capital would not reach $15 billion in 2012.

“A report has shown that only $10.49 billion worth of FDI projects have been registered over the last 10 months, which is just equal to 75.3 percent of the same period of the last year.”

How I wish we had Vietnam’s problem. They are experiencing a slowdown in FDI and will only have a little over $10 billion this year… a pittance compared to their all time high of $71.7 billion in 2008.

Last Oct. 10, PhilStar carried a story reporting on the good news that our “foreign direct investments (FDI) breached the $1-billion mark in the first seven months of the year –  nearing official forecast, according to the Bangko Sentral ng Pilipinas (BSP).

$1 billion and we are jumping up for joy already. And guess what, BSP is only forecasting $1.2 billion for the year. All that are already “reflecting foreign investors’ growing optimism over the country’s macroeconomic fundamentals,” a BSP statement said.

Just think about it… $1 billion in a good year for us… over $10 billion for Vietnam in a bad year. Tama ba naman yan?

“The Philippines must attract much higher levels of FDIs in order to achieve its goal of sustained, inclusive high growth rates,” former Budget Secretary Benjamin Diokno said. Administration officials may say that Diokno is just a professional critic of P-Noy but I say there is something to what Diokno is saying.

Indeed, FDI inflows to the Philippines, despite all the great reviews on our financial situation, lag behind most of our Asean neighbors. The UN Conference on Trade and Development noted that the Philippine’s share of FDI going into Asean in the first half of the year was among the smallest.

In more specific terms, FDI flows into the Philippines according to UNCTAD rose 10.6 percent to $0.9 billion this year from $0.8 billion last year. Cambodia received the same amount, but enjoyed a faster 166-percent year-on-year growth. Singapore topped the region with FDI inflows of $27.4 billion.  Indonesia came in second with $8.2 billion in inflows. Thailand placed third with an FDI haul of $5.6 billion while Malaysia cornered $4.4 billion.

This was why I was saying last Wednesday that P-Noy must make an earnest effort to find out what is going so wrong for us. Why is there a great disconnect between what the good reviews of our economy are saying and the amount of FDI actually coming into the country.

I wish the President would view all these good reviews with a healthy amount of skepticism until such time as the investments start flowing in as liberally as the good words. The real test of a successful economic program is creating enough jobs to minimize poverty.

And we need foreign investors to turn things around. It is also of no consequence to Juan de la Cruz if we have the world’s best Central Bank governor and the world’s finance secretary of the year if there are still at least three million Pinoys out of work.

The numbers are all so very clear. We are trailing our ASEAN neighbors in attracting investments that could create those jobs and that should worry P-Noy. Unless we do a better job of attracting investors, we cannot create the jobs we need to reduce hunger and poverty among our people. It is as simple as that.

CAAP

A US-based reader sent this e-mail reacting to our column last Monday on the need to outsource some CAAP functions because of its inadequacies and inability to get that FAA upgrade.

I would like to start out by thanking you for writing this. It did contain much information that the CAAP and the predecessor ATO have consistently chosen to ignore.

Here is how we do it here in the US: The Federal Aviation Administration (FAA) provides the air traffic services. All of the navigation aids are incorporated into the National airspace plan. The airport authority (by whatever name) is responsible for operating the airport.

One of the CAAP’s primary problems [and that goes way back to the days of the Air Transport Office (ATO)] are the totally unqualified personnel. These people were hired not for their “qualifications” but simply because they were willing to work for the pittance of wages plus all of the money that they were able to get directly and indirectly from the operators for the conduct of “inspections”.

There was a case where a “check pilot” (old ATO terminology) was a helicopter pilot, but NOT qualified to operate any airplane. He conducted a “check ride” for the issuance of a type rating in the B-747-400 aircraft. There were (and most likely still are) personnel who are still conducting those “inspections” (and other certification and surveillance activities) who do not even possess a pilot license.

I am sure that you are aware of the scandal in recent years. There have been instances whereby the personnel licensing section of CAAP have given [sold] pilots licenses to student pilots who were not qualified.

Another of the “check pilots” owned a flying school that was, supposedly--”certified” as a flying school. Of course, there could be no conflict of interest---could there????

The real problem is that the intention of the new law that created the CAAP to really be an “independent agency” has not been implemented. In other words, it is still unable to hire and fire without having the Civil Service Commission or the courts telling the CAAP that they cannot fire any person… even one who does not meet the suggested standards outlined in the International Civil Aviation Document (ICAO) Document 8335. Until then, the problem is not going to be solved.

It is a complex situation but one, if given a chance, is completely solvable. Given the current situation, they all seem to be striving to prove the Einstein definition of insanity.

It is well past the time for persons that really care, as you have demonstrated that you do, to continue to press for changes that are sorely needed. I have no interest in this except the interest of the Philippine people.

Complaint

Jose Villaescusa sent this one.

A woman filed a complaint against a hospital, stating that after recent treatment her husband has lost interest in SEX.

The doctors replied in their defense..

“All we did was correct his EYESIGHT!”

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter@boochanco