FDIs seen rising 20%

MANILA, Philippines - Foreign direct investments (FDIs) to the Philippines are expected to grow 20 percent this year compared to a year ago given the country’s improving competitiveness and workforce, the Department of Trade and Industry (DTI) said.

Trade Secretary Gregory Domingo said during the Forum on FDI: Engine for Job Growth organized by the European Union (EU) Delegation to the Philippines and Friedrich Naumann Foundation for Freedom yesterday, the DTI expects to match last year’s FDI growth rate this year amid government’s efforts to provide an improved investment climate.

“We expect at least a 20-percent growth in FDI this year to be driven by the increasing competitiveness situation of the Philippines, in particular the increasing capability of our workforce,” he said.

“(The increase is) to be led by a resurgence in manufacturing as well as continuing fast growth of the service sector, of the IT-BPO (information technology – business process outsourcing) sector,” he said further.

FDIs reached $3.9 billion last year, up from the $3.2 billion in 2012.

Domingo said the government has been working on reforms to make the country a more attractive place to do business.

“Government has been busy establishing an attractive business environment. From a business perspective, what that means is you reduce the risk that a business faces whether it be financial risk, environmental risk, regulatory risk or any kind of risk,” he said.

He said the government has also been spending more on health and education to improve the quality of the Filipino workforce, the country’s biggest competitive advantage.

Aside from government efforts, he said more FDIs are expected this year as the Philippines benefits from the rising labor and inflationary costs in neighboring countries.
 

But while the Philippines is becoming a more attractive destination for investments, he said much more needs to be done to tell the world of the country’s growth story.

Bosch Philippines managing director Andrew Powell said in the same event that while there are many positive developments here, the country is undersold internationally.

 â€œThe Philippines is not known. We need to promote that further,” he said.

EU Ambassador to the Philippines Guy Ledoux said in the same event the bloc is playing a role in marketing the Philippines through a program which provides subsidies for the trip of European companies interested to check opportunities here but are hesitant.

The program is being undertaken with the European Chamber of Commerce of the Philippines.

“We have a new program. We will try to attract more European companies here,” Ledoux said.

At the same time, he said opening sectors to foreign investments such as retail and banking would allow the country to attract more investments.

House Speaker Feliciano Belmonte, Jr. said in the same event he is advocating amendments to the restrictive economic provisions of the Constitution through House Resolution No.1 which seeks to insert the phrase “unless otherwise provided by law” to Articles XII (national economy and patrimony), XIV (education, science and technology, arts, culture and sports), and XVI (general provisions) for Congress to be able to ease restrictions on foreign ownership in certain industries in the future.

“I believe easing of foreign restrictions will send a signal to foreign investors,” he said.

He added that the Congress intends to pass bills that would improve the country’s competitiveness including the anti-trust or competition bill, rationalization of fiscal incentives, Bangsamoro Basic Law, amendments to the Bangko Sentral ng Pilipinas’ charter as well as Land Use Act.

For his part, EU-ASEAN Business Council vice chairman Donald Kanak said putting in place policies to create an environment more conducive for investments would not only lead to creation of jobs and growth.

 â€œSuch brings other benefits to emerging economies such as innovation, technology and global best practices,” he said.

Net FDI for the first two months of the year reached  $1.377 billion, 25 percent lower compared with the same period last year.