YET another typhoon, and in September. I have lost count of how many weather disturbances there have been over the past months, I can barely remember when we last had a sunny weekend day here in Alabang. Must be something to do with climate change, the melting of the polar ice caps, and holes in the ozone layer. The weather is beginning to remind me of Manchester, but 20 degrees hotter.
No column last week because I was in Bangkok, it was sunny there! But it’s not only in the weather that you notice the differences. Bangkok, which used to be the most congested city in Asia whilst still congested at peak times in parts, now moves much better. Most noticeable to me though was the number of expatriates and their families around, Caucasians all over the place, no doubt some holidaymakers, some retirees but also people who were obviously there to work. Not too many Caucasian expatriates around here, or is it my imagination?
Of course foreigners take jobs from the local employment market, they use the infrastructure and perhaps the social welfare services. Not too many people see them as actually contributing or giving more than they take. Undoubtedly there are some foreigners who do take more than they give and there are some against whom the state has to do its duty to protect the citizens. From the perspective of the average foreigner the Philippines is an easy place to spend money but a very hard place in which to make any. The old joke comes to mind. It goes, “How to make a small fortune in the Philippines? ”Well, “go there with a big one!”
The Philippines appears such a welcoming place really, big smiles, (sometimes) some sunshine, people who at least appear to speak and understand English—not that they understand me—must be my gruff voice or my pronunciation! It’s good for a holiday, nice beaches, good hotels etc. So many stories of failed entrepreneurial endeavours by foreigners, all well-intentioned, some rather ill-conceived but some very well-conceived which still can’t be made to work effectively. I think it is not necessarily because they are foreign entrepreneurs, it is just a double risk, mid to large entrepreneurship is not really encouraged in a Philippine setting, and the road for foreigners (other than I have to say within the economic zones) is such a long and tortuous one.
Again I must be coming across as rather negative about the Philippines. I am personally not, and I am after all an investor in the Philippines. I have travelled the long and tortuous road, and am continuing along it, but what a hard road it is, strewn with hurdles and surprises. The Philippines does not do too well on the country risk ratings, so to get investment here in the first place is a major challenge and having overcome that, to actually make it work to the point of getting a return in an honest way is not easy. The Philippines ranks a short way above Laos amongst Asean members for ease of doing business. Public-private partnership schemes are the latest idea to attract investment, but like the privatization of the power generation facilities of National Power Corp., the investment for the PPPs appears to be targeted at domestic rather than foreign funding—school classrooms? Wish somebody would realize that the domestic capital market is just not big enough to propel the Philippines into developed nation status and that the Philippines is not a magnet for foreign direct investment.
It is not too difficult to understand why the Philippines does so poorly in attracting foreign direct investment. Basically it seems to be widely held in influential quarters that the Philippines doesn’t really need it, of course an assumption whilst in the interests of some is certainly not in the interests of the public. Main criteria affecting multinationals’ selection of foreign investment destinations according to Asean are presence of supplier/partners, business friendly environment, availability of skilled labor, quality of infrastructure and government effectiveness. Indonesia is overtaking the Philippines in ease of doing business and as an FDI destination. Indonesia attracted more than twice the FDI for the Philippines in 2009, and the Philippines is certainly not becoming a more attractive destination as time goes by.
Something has to change, not only is more FDI needed, there is also a need for a range of source (investor) countries; otherwise economic sovereignty becomes threatened, and that should be the last thing the Philippines wants . . . Shouldn’t it? –MIKE WOOTTON, Manila Times
Mike can be contacted at mawootton@gmail.com.
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