Why do legitimate Filipino businessmen stay away from the Philippines?

It’s very difficult to do business in this country, with a lot of tedious procedures needed in securing all sorts of permits and licenses that take so long to accomplish. By the time the process is done, almost half the investor’s capital has been spent for tiresome paperwork made worse by red tape – plus additional expenses “for the boys” to hasten the process.

It’s an open secret that corruption is turning off a lot of investors from doing business in the Philippines – ranked as the 4th most corrupt nation out of a field of 16 major Asia-Pacific investment destinations. In Malaysia (which has greatly improved its image) corruption is kept at a minimum of 10 percent. While any form of corruption should be decried, this “minimum rate” helps investors calculate the approximate costs of doing business and ensure that they will not go overboard with their budget.

In the Philippines, the budget “for the boys” used to be 10 to 15 percent – but now the rate varies depending on the nature of the project and who or what department is involved. Nowadays, it can go up to 35 and even 50 percent – but I’ve been told that it can reach as much as 80 percent! Corruption has been in existence for several decades now, and over the years, it has gotten out of hand. Whoever it is who will take over the administration will wake up to the realization that it will not be as easy to eradicate the kind of corruption that has become endemic in this country. It will take a lot more than sincerity or good intentions because it has become ingrained in the system, with conditions now similar to a Catch-22 situation.

Restrictive provisions in the Constitution also prevent people from increasing investments, compounded by the fact that government over the years has developed the reputation for changing rules midstream. Take for example the recent example involving the Comelec’s ballot secrecy folder project. After contracting the services of a paper manufacturer to provide 1.8 million pieces of 28 by 9.5-inch blue plastic folders with expandable spines worth P380 apiece – or almost P700 million – the poll body is backtracking, saying it committed a lapse in judgment and belatedly realized that the cost is “a bit luxurious” since it is almost equivalent to 10 percent of the cost of the automated machines.

No doubt the project is too ambitious since an ordinary cardboard folder longer than the usual size would just as sufficiently do the job of covering the ballot from prying eyes as a voter fills in his choices – at a much lower cost of less than P4 per piece. But what’s even more ridiculous are claims by the poll body that they have been misled when they approved the design specification during an en banc session, or that a typo error caused the mistake because officials thought the cost per folder would be P3.80, not P380.

But given the circumstances, one cannot really blame the contractor should he seek redress later since as he pointed out, he has already spent a lot of money in sourcing out the materials and equipment for the production of the plastic folders after the Comelec Bids and Awards Committee virtually gave it the go signal.

Just a couple of months ago, business groups were also in an uproar over the unprecedented decision of the Bureau of Internal Revenue to reverse an old policy exempting certain imported gasoline raw materials from excise taxes – and ruled that the new taxes can be imposed retroactively. Businessmen plan their budgets and decisions based on existing rules, rates and policies, so obviously, suddenly slapping them with new taxes that take effect retroactively meaning at a certain time that has already passed and not after the new policy has been formulated – will certainly wreak havoc on their businesses. As they say, it’s not fair to change the rules midstream.

Incidents such as these can really discourage not only foreign investors but even local businessmen (many of whom are doing well in other places) from increasing their investments into the country. But I’m very happy to see that the government for once has been able to convince a reputable company like DM Consunji to take on the Skyway project encompassing Bicutan in Parañaque to Alabang in Muntinlupa, with the entire bidding process conducted with transparency.

It was amazing how the local construction company has been able to help the traffic flow rather efficiently, in contrast to the frustrating pace when CITRA – an Indonesian firm – was handling the project months ago. As a matter of fact, DM Consunji is set to finish the second phase of the Skyway project in the South four months ahead of schedule, with the Sucat interchange most probably opening before the advent of a new administration in June.

The P8-billion project will link the Skyway to the South Luzon Expressway, and Consunji is understandably proud that they are able to accomplish the project at a much lower cost. If I’m not mistaken, this is the first time that a local construction company is handling a major infrastructure project – which proves that legitimate and reputable Filipino firms can deliver the same quality of work done by foreign companies if given the opportunity.

Since its inception in 1954, DM Consunji has developed a reputation as the “builder of landmarks,” pioneering the use of advanced construction and engineering technologies in its projects. It’s also the same firm that is involved in the construction of the LRT extension project from North Avenue to Monumento – which I am told is proceeding very smoothly with very minimal if not inexistent disruption to the regular flow of vehicles in the covered areas.

The country needs more business investments to sustain economic growth – let’s not make the business climate unattractive even to Filipino businessmen. –Babe Romualdez (The Philippine Star)

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Email: babe_tcb@yahoo.com