MANILA, Philippines - The Philippines will have to further improve its business climate and ease foreign restrictions to allow more investments to come in if wants to grow its economy faster and reduce poverty significantly, according to a US-based analytics company.
Rajiv Biswas, Asia-Pacific chief economist at IHS, told reporters Tuesday night, that improvements achieved by the Philippines in World Bank’s Ease of Doing Business survey are still not enough to really drive economic potential growth over seven percent and really trim poverty rate.
“The problem for the Philippines is that for many years, it has been an economy dependent on workers going abroad and sending remittances. It is sending workers abroad because there aren’t any opportunities in the Philippines,†Biswas said.
“No doubt, remittances are a stabilizing factor for the economy, but going forward… it’s the business climate that should be improved. If you look at the Philippines’ ranking in the ease of doing business… it’s way down… it should be aiming at top 40, or top 20,†he continued.
The Philippines is ranked 108th in the latest Ease of Doing Business Ranking released in October 2013. The country climbed 30 spots from the previous ranking, marking its greatest improvement since the survey started 11 years ago.
But Biswas said the government should look at in great detail the indicators in said ranking and do what needs to be done to further improve the business climate in the country.
“Improving power [situation], infrastructure, trade, ports, and airports… a lot that can be done and needs to be done. If there’s a real effort to start upgrading infra in the next three to four years, it can really make a difference,†Biswas stressed.
Manufacturing should be among the sectors being expanded by the government, he noted, adding there are current opportunities in this sector given rising wages in China and increasing costs for firms to operate there.
“People now want to find another place to build low-cost factories. But why are they not coming here? It’s because of these things – the infrastructure, for one,†Biswas said.
“I think there could be huge FDIs (foreign direct investments) into manufacturing, and that will create jobs. It’s already getting jobs in services, construction, and what is missing is manufacturing,†he continued.