European chamber urges RP to look West

The Philippines remains under the radar of European investors, and to help reverse that Filipinos should pay more attention to the Old World rather than focusing too much on the US, the European chamber said. “The Philippines is US-centric. The end of the rainbow goes to the US [for most Filipinos],” Hubert d’Aboville, president of the European Chamber of Commerce of the Philippines (ECCP), told The Manila Times in a roundtable on Thursday.

He added that Europe has 500 million people—a large, affluent market just waiting to be tapped by Filipino traders.

The Philippines has yet to reach out to Europe and establish deeper economic and trade ties, he said.

Henry Schumacher, European Chamber executive vice president, agreed. He said more Filipinos should show an interest in Europe just like what it has shown in the US, the largest trading partner of the Philippines.

For instance, he added that European firms offer plenty of business processing outsourcing opportunities, but instead of going to the Philippines, they go to India.

“Look West,” Schumacher said. “It takes two to tango.”

Difficult business environment

At the same time, many Europeans were hesitant into investing in the Philippines, as the chamber officials noted that doing business in the country was difficult.

Schmacher said the investment “negative list” is a deterrent to the entry of foreign capital, so is red tape in local government units (LGUs), and the country’s weak legal system.

The “negative list” in foreign investments, which includes the land ownership restriction for foreigners and the cap for foreign equity, turns off European businessmen, he added.

Schumacher said the so-called ecozones managed by the Philippine Economic Zone Authority (PEZA), which also offer incentives and other perks, were the only havens where investors felt relatively safe from the country’s difficult business environment.

Schumacher also said that doing business here was beleaguered by a judicial system that was too slow in making decisions. “Some businessmen, therefore, want to keep disputes out of court, as waiting for decisions take too long.”

D’Aboville also said that red tape continues to plague business transactions with local government. “What investors need is red tape to be completely out today.”

But he added that there were simple, basic remedies that the Philippines could also consider. When he first visited the Philippines in 1977, some 20 to 30 European airlines flew to the Philippines. But now, because of high taxes, only the KLM Royal Dutch Airlines flies here from Europe.

Schumacher said Europe was a major source of tourists. The Philippines wants tourist arrivals to hit 5 to 8 million a year, but he added, “You have no transport.”

Bullish on RP

Despite the problems, the European chamber remains bullish on the Philippines, d’Aboville said, adding that this country is rich in natural and human resources.

Earlier, the Joint Foreign Chambers of the Philippines, which includes the European chamber, have identified what it calls “seven big winners”—sectors that are expected to boost the country’s growth when the global economy currently reeling from a crisis goes on an upturn.

These sectors are agri-business; creative industries; information technology, business process outsourcing and knowledge process outsourcing; health and wellness, medical tourism, and retirement; infrastructure; manufacturing; and mining.

Schumacher noted that most of these sectors are service-based, as he said Filipino workers are known worldwide as capable and talented.

“Filipinos have the edge. You’ll find a Filipino roaming in Rome or London, one’s a coal miner in Angola, another a truck driver in Iraq . . . I’ve never seen any people that adjust so easily, it’s amazing,” Schumacher said.

He added that Filipinos workers were admired worldwide. “If you can do it outside, you can do it inside [the Philippines].” –Ben Arnold O. De Vera, Reporter, Manila Times