‘We don’t want surprises,’ UK exec says on RP rules

A visiting British trade official yesterday warned that the Philippines stands to lose more foreign investments to its Southeast Asian neighbors if the government fails to institute economic reforms and strategies that will boost the country’s attractiveness in the world market.

Andrew Cahn, chief executive of United Kingdom Trade and Investment, said the Philippines must seriously work on having a “stable, predictable, and legal regulatory political environment” to draw more investments.

“I think it’s essential that regulatory treatment, tax treatment, allocation of licenses, and all of these, must be transparent and must be predictable. What we don’t want to have are surprises,” Cahn told a press conference.

Last year’s global surveys reveal that the country continues to slide from rankings in terms of competitiveness.

From 71st place, the Philippines slid to 8th place, down by 16 notches, among the 133 countries based on the World Economic Forum’s Global Competitiveness Report of 2009.

Based on World Bank’s Ease of Doing Business 2010, the Philippines ranked 141st from 144th place.

In the World Competitiveness Yearbook by the Institute for Management Development, the Philippines also found itself in the lower echelon among 57 economies, at 43rd place, which is a slip of three notches. Still based on the World Competitiveness Report, the Philippines placed last among the 13 countries in the Asia-Pacific region.

International surveys also showed that foreign investors are wary of political risk, including the risk of nationalization and expropriation, saying these are greatest government-related obstacles to doing business in the country. Local and foreign business chambers have also highlighted the need for addressing graft and corruption and continued reforms in the country.

Cahn admitted that the Philippines is “sometimes” problematic in the aspect of providing good business climate for foreign investors.

“It’s difficult to generalize but I think some of the other countries are more keen to attracting investments and put more effort,” Cahn said.

“For example in Singapore, they invest a lot of money in foreign direct investments, it has a Cabinet level leadership, employs very high level staff most with MBAs, they give lots of incentive, they focus on particular sectors, and they continue to attract high end high value FDI. Companies going to Sinpapore are very confident on how regulations will be applied. I can say that Singapore is more attractive than the Philippines but I don’t see any reason why the Philippines can’t catch up. It’s a big marketplace out there,” the UK official added.

Despite the Philippines’ poor global standings, Cahn said he continues to have high hopes for the Philippines.

Cahn said the Philippine government should realize its assets and learn how to capitalize on it.

“Your edge is that you have a very good geographic position. The Philippines has naturally good location for logistics and you should be capitalizing on that. You have an advantage on your population. The world’s language is English and you’re very lucky your people speak excellent English. That’s an advantage and capitalize on it. Build on skills of your people. You’re very competitive in salary and labor cost and you’ve done very well,” he said.

Cahn also expressed hope that whichever presidential candidate would win in the elections “will do everything they can to encourage foreign direct investments.”

“I strongly believe that FDIs is a win-win solution. A win for receiving country because jobs, investments, resources, and profits flow and it’s a win for the company because they too, can make money and make investments,” he said.

“Whoever wins, I hope will make a strong pitch to lure investors and increase their flow in the Philippines. I very much hope they will choose a particular sector to drive forward,” Cahn said. –Michaela P. del Callar, Daily Tribune