(Editor’s note: The following is the Board of Investment’s faxed letter dated May 19 but sent on May 26. We publish it in toto and unedited but minus the barely legible “graphical representation” mentioned in paragraph 11.)
We would like to call your attention to the editorial entitled “The Height of Incompetence” that was published in The Manila Times on May 13, 2009. The article refers to findings contained in a supposed document of the World Bank Group Advisory Services tagged as the 2009 Global Investment Promotion Bench–marking (GIPB) Report. Albeit we respect the opinion of your writer considering that we hold positions of public trust, it is also our duty as government officials to properly inform the people by putting the said findings on clearer perspective. Even as we defer to views of our clientele and network in general, we take strong exception to be aligned either with the term “incompetent” or “negligent.”
We note at the opening statement of the editorial that reads: “ . . . rather crude test by a sophisticated agency like the World Bank.” Indeed as in any assessment process of this sort, it is only as good as the methodology it employed and the accompanying samples of responses it drew its findings from. Without discussing the details since these are generally described in the same document, the scope and depth of evaluation for individual countries were indeed limited since the independent consultants deployed by the World Bank had to cover 181 national and sub-national investment promotion intermediaries (IPI) within FY 2008 which was the period of the evaluation. For the Philippines, only the ratings for the Board of Investments and the Philippine Economic Zone Authority were covered. To mention, there are eight other sub-national bodies that promote capital inflows into the country that are not included. Incidentally, their mandates are geographically specific.
As you could surmise, there were only two primary factors assessed, namely, the websites of each IPI and their respective abilities to manage and respond to investment inquires (equally for manufacturing and services). Let us put on record that we share the view that in a globalized economy propelled by the Internet, these on-line facilities are primary promotional and access windows to each entity. Consistent with our thrust for transparency and ease in our dealing, the World Bank com–mended our strong performance in our website’s architecture, design, content, and promotional effectiveness.
For the other factor, the World Bank consultants made simulated inquiries by using a “mystery” shopper approach. This fact alone puts the veracity of the findings in question since our frontline counselors in the BOI are tasked to prioritize those inquiries that they discern as serious and real. So without prejudice to anybody else’ opinion to the contrary, it is our view that the above evaluation criteria are not comprehensive to gauge the actual competency of any IPI in pursuing its mandated tasks.
Speaking for and on behalf of the BOI, our overall rating is way above the regional average for East Asia and the Pacific (EAP). Additionally, we are at par with the mean score for Europe and Central Asia. For EAP, only the IPIs of Brunei, Malaysia, Singapore, and Fiji Islands are rated better overall in varying factors. In fact on a global scale and per the same World Bank report, only OECD economies fared higher than us.
World Bank also notes that the BOI has substantially improve its rating since the last round of assessment done in 2006. The improvements in our website and our ability to manage the simulated manufacturing inquiry are actually reflected in our comparative score among the IPIs covered by the study.
Certainly, just like any evolving organization that aims to achieve excellence in performance amidst the ever-changing business landscape, we acknowledge that there is much room for improvement. Lest this be construed as a defense to media scrutiny, we perceive the need to briefly state what we achieved and our on going efforts to change the public’s point of view and to re-assess similar bench–marking methodologies.
First of all, our organizational tenet is to become an active partner of the business community beyond just managing the local incentives regime. Drawing from experience and feedback from the private sector and specific recommendations also from the World Bank in 2007, we implemented and agency-wide reengineering in the middle of last year. This has refocused our collective attention to investments promotion activities rather than policy regulation. With these major structural changes in place, we seek not only to attract prospective investors and make them decide to locate their operations in the country but also to persuade them to retain and expand their businesses on site—applying a concept we call total investor-related solutions. Also cognizant of the recommendations for appropriate reforms in institutional structures, the reengineered BOI allocated substantial human and budgetary resources for investment promotion. Beginning last year, two functional groups—i.e., the Investments Promotions Group (IPG) and the Investor Services Group (ISG)—are now tasked to spearhead in this area.
The IPG leads in implementing investment promotion strategies and coordinating efforts to synchronize promotional programs and activities at the local and national levels. It embarks on cost-efficient and aggressive advocacy campaigns aimed at positioning the Philippines as an investment destination of choice in Asia. For its part, the ISG provides crucial, expanded and upgraded services to a broad range of investors. This group offers both frontline and after-sales services designed to persuade investors to locate and retain their capital in the country. Two frontline departments are highlighted under ISG. One is called the National Economic Research and Business Assistance Center that offers business counseling and information on doing business in the Philippines in the light of their pre-operating.
Stages. The other one is called the Investment Aftercare Services Department to help forge stronger businesses ties and seek long-term strategic business relationships and make representations on behalf of the private sector across a wide network of agencies.
Allow us to also quickly make reference to the results of the 3rd Quarter 2008 investor after care efforts of the agency that showed our firm resolve to address investor concerns. The graphical representations below shows the Issues and Concerns obtained from the company visits conducted within the National Capital Region (NCR) and nearby provinces during the 3rd Quarter of 2008 alone.
In general, Query still ranked 1st in terms of number of issues received and resolved with 92% fulfillment score. The aspect of Government Policies ranked 2nd with 69% level resolution. This could indicate that reforming processes and procedures that affect business transactions are shared responsibilities across government agencies. A very remarkable status is the decline of Red Tape issues to 4th rank. This manifests our continuing efforts to simplify transaction procedures. Other issues like Power and Labor require long-term reviews and any relevant improvements require longer time to manage. In this connection, we believe that the best parties to attest to our accomplishments are those whom we actually served.
Again, we take exception to the categorical statement in the editorial that refers to roadshows and international promotion activities done abroad as “junkets.” Our records show that we actually just had three specific outbound missions lat year which were in India, Singapore and Japan. The choices of these missions were not “hit-and-miss” but were strategically selected based on solid business prospects that were predetermined way ahead of the actual travels. Visibility therefore creates that needed “buzz” to call attention to the Philippines given fierce competition from other countries.
Additionally, various forms of assistance were also provided by the BOI during presidential visits to drum up opportunities for foreign investors to locate their operations here. These forms of assistance are not simply administrative but in a sense substantial as these involve preparing country papers and industrial descriptions and making appropriate marketing pitch during these visits.
On top of these outbound missions, we focused our attention to businesspersons and teams that visited the country to explore business prospects—actually about 196 foreign companies came last year. Let me stress however that these are not “cheaper” venues for promotion as hinted, but are legitimate effective differentiated marketing strategies. We provided full service to these business–persons by organizing visits to companies they wanted to tie up with, arranging relevant briefings and meetings with government and private entities, and scheduling site inspections. From these business interests, some 208 leads (or expressions of interest) were generated and in effect, increased the pool of potential investors that BOI will continue to interface and follow them on until they evolve into realizable capital inflows in the future.
In the meantime, any reference to decreasing foreign direct investments is an issue faced by the receding world economy in general. In ways it could, the BOI is poised to respond the ramifications of the global crunch, including the challenge of unemployment. Believing in capital formation aligned with expected financial rebound in the future, we have crafted the new Investments Priorities Plan to specifically address possible capital flight and loss of jobs.
As this end, we thank you for providing us the venue to say our piece. If it is expedient for you, we could arrange a briefing or even a walk-through of our processes and procedures so that we could expand the mileage of our programs through responsible media companies like yours.
Thank you and best regards.
Very truly yours,
Lucita P. Reyes
Executive Director
Investment Promotion Group
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