MANILA – European businesses operating in the country and in the region said the Philippines offers the “brightest” prospects among ASEAN countries in terms of attracting foreign direct investments (FDI) despite the need for more improvement in the ease of doing business.
The European Chamber of Commerce of the Philippines (ECCP) and the EU-ASEAN Business Council, which groups various European countries’ business chambers, voiced the bullishness of their members in the domestic economy as they hold the upcoming 10th European-Philippine Business Dialogue this week in Makati with different government officials. In the same meeting on Thursday, May 25, the ECCP will also handover 11 sectoral policy papers to the government.
“We have witnessed significant strides in boosting business confidence and the country’s position as a competitive destination for trade and investments,” said ECCP President Lars Wittig.
This is following the enactment of economic reforms and the recent creation of a “green lane” for strategic investments. Wittig also cited solid headway in facilitating ease of doing business, particularly in terms of the ease of establishing reliable supply chain connection and structural factors as the country moves 17 spots, from 60th to 43rd place, in terms of logistics performance index as reported by the World Bank.
“Certainly, there is much opportunity for Europe and the Philippines to strengthen their economic ties, especially in line with their longstanding trade and investment relations. It is highly encouraged that the Philippines further leverages its status as the only ASEAN country beneficiary of the EU GSP+ trade preference. We equally look forward to further advancements in the EU-PH FTA discussions, which are crucial for the Philippines to become a magnet for European investments,” he said.
With these major breakthroughs, he said, the ECCP also underlines the immense potential of the country in attracting investments not only from Europe but also from European businesses in Asia.
Wittig further noted that Philippines has one of the highest GDP growth globally in the first quarter this year if not the highest globally and moved up considerably in the ease of doing business globally. This only means, Wittig said, that the government is “moving the talk now in making it easier for foreign investments to come in and start doing business in the Philippines.”
Comparatively, he said, Malaysia was in top 12th spot in Doing Business ranking globally but EU investors are not feeling the 12th spot because because of its Bumiputra rules. Meantime, he said, Vietnam also dropped down in its ranking in doing business.
“So, if I am a CEO of a European company I would be ashamed if I don’t have a strategy for the Philippines. Before the Philippines was not even mentioned, but how can you face your board if you just talk of Thailand, Indonesia without mentioning Philippines, maybe you got away with that before, but now it is not a very good reason not to be there,” he added.
For his part, EU-ASEAN Business Council Executive Director Chris Humphrey reported that last week’s EU Business Mission to the Philippines was the attended by 36 different entities and over 70 businessmen, the largest so far in their history. The mission was attended by large EU financial institutions, automotives, manufacturing, digital space, electronics, among others who are not just thinking of the Philippine market but to serve the ASEAN market, as well.
“We have so much going for the country,” said Humphrey citing that the Philippines has one of the best GDP growth, with forward thinking economic team and reforms that make the Philippines attractive to foreign direct investments.
“We see at the council huge potential of FDI from EU and increasing trade with EU,” he added.
Humphrey further noted the need for the Philippines to push for the negotiations of a free trade deal with the EU and the EU-ASEAN FTA also. In addition, the implementation of the Regional Comprehensive Economic Partnership and forging more FTA deals are going to boost the country’s attractiveness.
Comparatively, Humphrey said the Philippines now has only two months to start a business while while Indonesia has six months or longer. He also acknowledged that there is still a lot more needed to sustain growth, like further cutting down the bureaucracy processes and making government procurement more transparent.
ECCP Executive Director Florian Gottein, likewise, echoed the prospects for the Philippine although he said EU businesses would like to hear “continued ease of doing business ” at the upcoming business dialogue.
He explained that further easing doing business in the country is critical to bolster the beautiful framework done towards the end of the previous administration, such as the passage of landmark legislations on Philippine Services Act, Retail Trade Liberation, Foreign Investments Act, which he said, gave a good ground for foreign investors to come to the Philippines.
He cited the need to strengthen the Anti Red Tape Authority (ARTA). “We need to do some catch up but the Philippines is entering a new level now,” he added
Gottein noted that one basis for EU business optimism is the entry of 62 new ECCP members this year only.
Wittig also forecasts that Philippines could be beneficiary of EU firms investing in Taiwan and wanting to relocate. He refused to identify these firms but said that EU investments in Taiwan is also bigger than the Japan and American investments combined in Taiwan. “So there is much focus in the Philippines now,” he said.
EU is the single biggest foreign investor in ASEAN with $350 billion but only $4.7 billion went to the Philippines, he added.
Humphrey also noted that being someone on the ground stressed that “the realities on the ground is more positive here.” He said that Malaysia has Bumiputra and Thailand has just had its election and is a bit uncertain, while Vietnam, which used to be the darling, is flattening out.
“But here, we have new administration with five years to go, young and intelligent workforce, we can can leverage and advance now,” he said.
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