Phl incentive policies slow foreign direct investments

CEBU, Philippines - For the Philippines to maximize the interest of the industry-based or the manufacturing sector investments, it has to review some of its policies in giving out incentives, and perks specifically for Foreign Direct Investments (FDI).

Economist Eduardo Banaag Jr., believes that FDIs will only come to the Philippines if some policies will be altered in favor of the foreign investors.

At present, he said the Philippines has no competitive advantage in terms of attracting FDIs, specifically the manufacturing sector, as compared to other countries in Asia, like China.

“I don’t know what we can produce here cheaper than that of China,” he said adding that the Philippines right now, is only more attractive for the services sector like the outsourcing, and others.

While the interest among FDIs now, is also to pour in capital to the attractive mining industry in the Philippines, policies have also constrained the foreign investors to come in.

“One of the most attractive investment opportunities in the Philippines is mining. However, the Philippines should classify and make stable rules on this sector,” he said.

Owning a land, and taxation problems are just two of the critical concerns that kept the foreign investors for mining from coming into the country, Banaag added.

If the Philippines will be able to change some of the policies in terms of attracting FDIs, there is no doubt the country will be able to stand in its “two legs”, which means providing growth for both services and the industry sectors.

Earlier, Asian Development Bank (ADB) senior country economist Norio Usui said that the reason why most Filipinos do not feel the good economic state in the Philippines, although supported by real figures, because it is currently walking on “one leg”.

This means, that the opening for jobs are only available to some segments, but the majority do not get same opportunity, due to its weak development in the manufacturing sector.

If the Philippines, will be able to tap the wealth in manufacturing sector, more and more Filipinos will be able to get employment, thereby spreading its economic vitality even to the undergraduates down the farmer or fisherfolk level.

According to Usui, the Philippines competitive advantage is in attracting the high value manufacturing sector. In fact, it is still ahead with other countries like Indonesia, and Vietnam.

What is missing though, he said is the proper implementation of policies in manufacturing sector, specifically in luring the high value investments in this industry. /JOB (FREEMAN)