Investor confidence in Phl rises: P-Noy’s good governance pays off

MANILA, Philippines – The Philippines has seen renewed investor confidence over the past few months largely due to the Aquino administration’s good governance thrust.

While greater investor confidence in the country is a reason to celebrate, this also means the government must continue to work hard to implement reforms to sustain the momentum.

Trade Secretary Gregory Domingo said the renewed investor confidence in the country has a lot to do with the present administration’s push to improve governance.

“P-Noy’s (President Aquino’s) good governance has really restored confidence in the Philippines among foreign investors,” he said via text message.

He noted that for the first semester of the year, the country has seen more visits from foreign company officials compared to that of the whole of 2011.

Trade Undersecretary Cristino Panlilio said in a telephone interview that for the January to June period this year, the Philippines entertained 28 in-bound missions, exceeding the 18 recorded for the full-year of 2011.

An in-bound mission involves the visit to the country of a group of businessmen coming from at least five companies.

Panlilio said some 320 foreign companies visited the country in the first semester.

“What is driving all of this? It is the central program of P-Noy, the Daang Matuwid or good governance…This is what is attractive to investors,” he said.

He said the Aquino administration’s good governance thrust meant every department did its part to fight corruption and promote transparency in government processes.

The anti-corruption efforts, he said, allowed investors to see the government treating everyone fairly, particularly in bidding processes.

Guillermo Luz, private sector co-chairman of the National Competitiveness Council said in a telephone interview that apart from more transparent bidding processes, there was an improvement in investors’ level of trust in the government as anti-corruption efforts have also resulted in better implementation of projects.

“Government spending has been accelerated so infrastructure projects are moving much faster,” he said.

He noted that the better and faster implementation of infrastructure projects meant the government is making progress in addressing infrastructure gaps, a factor which has hindered investments to the country in the past.

The government has reduced red tape and streamlined processes to make the environment more conducive to businesses.

Luz said the country’s strong macroeconomic fundamentals and improved credit ratings which considered the government’s anti-corruption efforts, likewise attracted people to place their funds in the markets.

The economy expanded by 6.4 percent in the first quarter, the second strongest growth posted in the region, with support from accelerated spending of the government and a rebound in exports.

Debt watchers Standard & Poor’s and Fitch Ratings have both given the Philippines a BB+ rating which is one notch below investment grade.

Moody’s Investors Service, meanwhile, has a Ba2 rating for the Philippines which is two notches below investment grade.

But while there has been an improvement in investor confidence in the Philippines, reforms must be pursued to sustain the trust level and entice more investors to the country.

“The government must improve on streamlining processes and act faster to respond to what investors need,” Luz said.

He said the government must strive to make an even more business friendly environment.

Domingo said the government is looking to pursue reforms to further improve the business environment through more efficient processes and a level playing field.

He said efforts have been undertaken to make the country more conducive for business with the launch of the electronic business registration of the Trade department which reduced the time to complete the process to 15 minutes from a whole day previously.

The government earlier this month likewise launched programs aimed at improving the micro, small and medium enterprises’ (MSME) access to credit.

Panlilio said the department is also supporting local businesses by putting up shared service facilities like packaging facilities or post-harvest facilities, which different enterprises could use to improve the quality of their products.

The Trade department said earlier it is looking to spend P700 million to put up 1,000 shared service facilities all over the country next year and to raise by 2014 the budget for such to assist more MSMEs.

Panlilio said the government is also looking to do more in terms of trade promotions.

“We have a conscious program to organize in-bound trade missions. We are working together with embassies for our promotion efforts all over the world,” he said. –Louella D. Desiderio (The Philippine Star)