European investors call for lower power costs, transparency

MANILA, Philippines – European businessmen yesterday urged the government to improve the business climate in the country by reducing energy costs, improving the transportation network, promoting transparency and dealing with graft and corruption.

Participants at the European Chamber of Commerce of the Philippines (ECCP) Business Conference held at the Renaissance Hotel in Makati City noted that the price of energy in the Philippines is among the highest in the world.

The foreign businessmen led by ECCP president Hubert d’Aboville also urged the government to forge a stronger economic partnership with the European Union.

Ambassador Alistair MacDonald of the European Commission said the Philippines is not taking advantage of opportunities that Europe has to offer in terms of trade and investments and that other Asian countries are doing better in this regard.

Macdonald listed seven things that needed to be done, among them improving business climate by cutting red tape, dealing with corruption and promoting transparency.

He also cited the need to upgrade the energy, transport and water infrastructure sectors in the country, improve the fight against poverty which includes promoting family planning, and accelerate the peace process so conflict areas can contribute to nation building.

MacDonald echoed the observation of foreign businessmen that the government must improve its antiquated transport facilities which use up costly energy.

“The price of electricity is higher in the Philippines than in almost any other country in the region while the basic transport network, notwithstanding work in progress on the road, rail and the roll-on and roll-off remains far below,” MacDonald noted.

D’Aboville added European businessmen are willing to invest in infrastructure projects as well as improve basic transport facilities in the country.

He also called on the government to address the problem of smuggling to encourage more investments in the manufacturing sector.

“Otherwise, there will be no incentive for the creation of manufacturing plants. Let me add, we need the continuous supply of power also because without power, there will be no economic activity,” he said.

French Ambassador Gerard Chesnel, representing the presidency of the European Union (EU), in his introductory remarks also sought increased economic cooperation between the Philippines and the EU.

“The economic exchange between the Philippines and the EU is not at the level that it should be,” Chesnel noted, adding that this could be due to a lack of information.

“The French people know very little about the Philippines,” he pointed out, even as he encouraged improving partnerships and cooperative agreements.

Trade Secretary Peter Favila, for his part, noted the “very good cooperation” between the EU and the Philippines, and asked the EU to “support proposals for free trade by amending protectionist economic provisions” in the Constitution.

Macdonald affirmed the EU’s support for the lifting of such economic provisions, but stressed that “this does not mean that we support Charter change.” 

During the forum, D’Aboville stressed the need for the Philippine government to open NAIA Terminal 3.

“More than three years have now passed and there is minimal indication of any real progress having been made with this matter. NAIA Terminal 3 has not been opened and the investors have not been compensated,” he said.

MacDonald, for his part, said foreign businessmen have not had “the pleasure of getting to know the NAIA-3.”

Oscar Lopez, chairman of First Philippine Holdings Inc., echoed the same sentiment.

“Let us settle once and for all the issue that is NAIA-3,” Lopez told the forum.

D’Aboville said even if the government were to sign today an agreement with an international or local contractor to complete the airport, it is unlikely to be ready within the next 12 to 18 months.

D’Aboville said it is vital for the government to improve the condition of the airports in the country since it is the first thing that potential foreign investors see.

“(Airports are) their first impression (of the country),” D’Aboville said. “I’m sorry to say that it has gone from bad to worse. A drastic improvement is needed.”

Favila however declared the government can open NAIA-3 before the end of the year, saying a local contractor was already tapped to finish the work on the mothballed airport.

“We already have a contractor. It was selected during a bidding early this month,” Favila said without naming the supposed contractor.

“The Philippine government is committed to open the airport and this time we will do it ourselves,” Favila said. “We want to open the terminal at the soonest possible time.”

D’Aboville, on the other hand, pointed out the need for the Philippine government to pay its contractors.

He said the European community is already getting frustrated with the Philippine government over the delay in opening of the airport terminal.

“There is really a frustration among the Europeans because the government always announces that they will open the terminal in six months and then say that the opening will be postponed for yet another six months,” D’Aboville said.

NAIA-3 remains closed even after its completion in 2002 after President Arroyo abrogated the contract with the project’s main contractor Philippine International Air Terminals Co. Inc. (Piatco), calling the contract “onerous.”

The Supreme Court later upheld the government’s position and declared the contract null and void for having violated the provisions of the Build-Operate-Transfer (BOT) law.   - Iris Gonzales, Elisa Osorio