Foreign ambassadors are urging the Philippines to continue implementing business friendly economic policies that will attract greater foreign investments, which are key to cutting poverty and achieving inclusive growth.
Australian Ambassador Bill Tweddell said these policies include a friendly environment, low corruption, good governance and strong legal institutions, certainty of contracts and strong competition law.
“In a nutshell: foreign investors are looking for certainty, transparency and the promise of fair treatment in the hands of the law authorities. In fact, these are the policies that any investor would want to see before committing in any fund in any market,” he said during a recent Arangkada Philippines Forum.
Tweddell cited economic benefits of foreign direct investments (FDIs) such as technology transfer and innovation, increased exports, higher tax revenues, new industries and expansion of existing ones, new infrastructure and more jobs.
Canadian Ambassador Neil Reeder said the inclusive growth strategies in the Philippines can include investment in infrastructure and education that would enable more people to gain productive employment in the formal sector.
Reeder also underscored the need for the Philippines to explore considerable underutilized potential especially of agriculture, manufacturing, tourism and mining sectors.
“Growth can also be augmented by reducing constitutional restrictions on foreign trade and investment. We encourage the Congress to continue its work in this area,” he said.
Reeder also encouraged the Philippines to build its trade liberalization agenda.
“We welcome the proposed FTA (free trade agreement) negotiations with the European Free Trade Area and getting ready for ASEAN 2015. Looks like I’m getting the hook. And we welcome the interest of the Philippines in the TPP (Trans-Pacific Partnership),” he said.
The TPP is a free trade agreement (FTA) currently being negotiated by the US and other countries throughout the Asia Pacific region.
For his part, Japanese Ambassador Kawasaki Ishikawa said the Asean Economic Community (AEC), which will be completed by the end of this year, will mean greater competition.
“The AEC is insight, so foreign investors may be looking for a better place to use their money. So it is, I think, the business environment and those investments will change the future of FDI,” he said.
Ishikawa also listed other factors to attract investments, including political stability, safety and security, good governance, consistent transparent predictable and accountable economic policies, sufficient infrastructures and reasonably priced energy supply.
“And if you look at the Asean countries, Asean has been providing incentives for FDI in the form of tax credit or tax holiday and other methods and these incentives may be useful if these majors meet the demands of the sector,” he said.
New Zealand Ambassador David Strachan said the Philippine government needs to continue to embrace and actively participate in the regional trade and economic integration.
“Already, the Apec (Asia-Pacific Economic Cooperation) economy accounts for 80 percent of Philippine’s trade growing at astonishing 8 percent annually. APEC therefore is not just a talk shop but it is making a real difference when it counts in terms of jobs growth, trade facilitation, and increased prosperity,” he said.
Likewise, Strachan said the AEC will enable the Philippines to better realize its comparative advantage in education, tourism, agriculture and manpower provision.
He said FTAs can help create conditions for a smooth exchange of labor and “can help realize that this country is a comparative advantage that should be seen as an opportunity, not a threat.”
“The TPP train, as others have said, is likely to be leaving a station of a not too distant future and is to be hope that is many regional partners as impossible, including the Philippines, are on board,” he said.
Switzerland Ambassador Ivo Sieber said the preparations of the implementation of AEC, together with the existing bilateral and multilateral trade and investment agreements, can enhance the country’s ability to promote further economic growth.
“Expanding and strengthening system of such agreements will allow Philippines to harness its potential or improve on the country’s productivity and to move towards a more inclusive development,” he said.
Republic of Korean Ambassador Hyuk Lee said investment promotion agencies, together with the Philippine government, need to play a more crucial role in presenting the Philippines as the best investment destination among the emerging markets in South East Asia.
He advised government agencies to make direct contact with major Korean companies such as Samsung, Hyundai and LG.