British envoy urges RP to capitalize on improved ranking

MANILA, Philippines – The United Kingdom urged the Philippines yesterday to “capitalize” on the interest of British investors to do business in the country, saying Manila’s improved ranking among key emerging markets for global investors in 2009 is a strong point to start with and very encouraging.

“I said to you the research where the Philippines is now moving rapidly up is an exciting market for British investors.  As I said, we’re the leading investors here so there’s plenty of evidence to show that British investors are positive about the Philippines,” British Ambassador StephenLillie said in an interview.

When asked if the Philippines’ improved ranking also helps improve its image as a laggard in Asia, Lillie said the Philippines being ranked ninth among key emerging markets for global investors in 2009, jumping 14 spots from 23rd place the previous year, in a new research published by the UK Trade & Investment showed British interests to invest here.

“It’s a very encouraging initiative and the important thing is the interest is there but we have to capitalize on the interest by providing advice and assistance to British companies looking at the market,” he added.

According to Lillie, the challenge of doing business in the Philippines is not that different to the challenges of doing business in a lot of emerging markets.

To help address the challenges, he said the UK has projects related to transparency, good governance project with the Philippine Stock Exchange (PSE) to improve the quality of information of listed British and corporate governance to give more confidence in the business environment here.

“From 23rd to ninth (ranking), there are few things to be done to level the playing field in business to have confidence they can compete on the same terms. Confidence of companies will be follow but I can assure you British business is doing well in the Philippines and they behave well,” he said.

However, he said significant problems like corruption and bribery encountered by big companies whether in the Philippines or anywhere else is bad for the country’s reputation.

British Secretary of State Lord Mandelson revealed last week the findings of the new report when he addressed the Economist Intelligence Unit’s Emerging Markets Summit.

The report examines global business attitudes to emerging markets in light of the global downturn.

The report showed that the basic conditions in the emerging economies are varied and not universal. China and India have continued to grow rapidly, although at less than the trend rate of the last decade. Other parts of the emerging world are also performing well relative to the rich world, but well below the recent trend.

The survey found that 77 percent of companies expect the prospects for the global economy to improve in 2010-11. sixty percent of companies surveyed expect to derive more than 20 percent of their total revenues from emerging markets in five years’ time — almost double the current figure of 31 percent.

However, political risk, including the risk of nationalization and expropriation, was cited by 50 percent of survey respondents as the greatest government-related obstacle to doing business in emerging markets.

In the Philippines, local and foreign chambers highlighted the need for continued reforms despite significant progress. The chambers jointly submitted to the government a list of legislative measures, which they believe will have significant positive effects on the country’s investment climate.

Lillie said the global recession was a wake-up call for companies to diversify their export base and seek out new opportunities in the emerging world as he also encouraged UK business to look to the Philippines and find new business in this exciting new market.

The United Kingdom is the top net foreign direct investment (FDI) investor in the Philippines, investing $298.17 million last year. There are currently around 200 British companies active in the Philippines, ranging from big multi-national to small and medium enterprises (SMEs). –Pia Lee-Brago (The Philippine Star)