JFC to 2016 bets: Assure us of key reforms now

By Catherine Pillas – October 7, 2015

To ease the apprehension of foreign investors over the change in leadership next year, foreign business groups on Wednesday urged presidential candidates to support policies that will modernize infrastructure, open up the Philippine economy, and eliminate red tape and corruption.

The Joint Foreign Chambers of the Philippines (JFC) said this and other key reforms would improve investor confidence and reverse the decline in net foreign direct investments (FDI) recorded in the first half of the year.

“The challenge is to increase FDI in the second half of the year and thereafter to even higher levels important for high, sustained and inclusive growth,” JFC said in a statement.

The JFC said among the actions that can be taken in the months ahead that will improve investors’ confidence include the “support by major presidential candidates for policies that will increase investor confidence to invest, including modernization of infrastructure, proposals to open the economy including mining, reduce business costs and unburden the private sector of red tape and corruption.”

JFC said enacting a number of legislative measures such as Apprenticeship Act amendments, Build-Operate-Transfer Act amendments, Customs Modernization and Tariffs Act and Foreign Investment Negative List amendments would help boost investor confidence.

Foreign businessmen also urged the government to accelerate the implementation of public-private partnership projects, reduce traffic congestion in Metro Manila, avoid the recurrence of port congestion, avoid brownouts during the 2016 dry season, and reduce flight delays at the Ninoy Aquino International Airport.

Investor confidence, they said, would be maintained via the timely processing of value-added tax refunds for eligible companies.

“[The Philippines must also] show progress toward entering into major new foreign trade and investment treaties with the European Union and the Trans-Pacific Partnership, which together comprise 60 percent of global gross domestic product with markets of some 1.3 billion people,” JFC said.

Citing data from the Bangko Sentral ng Pilipinas, JFC noted that net FDI inflow for the first half was $2 billion, 40 percent lower than the $3.4 billion recorded in the same period last year.

“The Philippine Economic Zone Authority reported new investment approvals for the first half of 2015 was $1.8 billion, down from $2.4 billion in the comparable period in 2014, or a 33-percent decline,” JFC said.

Foreign businessmen said the downturn in the first semester of 2015 followed a record year in 2014 when total net FDI reached $6.2 billion, up 479 percent from $1.1 billion in 2010.

“Although 2014 was a record year for FDI flowing into the Philippines, many commentators have observed the inflow was much less than Singapore ($67.4 billion), Indonesia ($25.7 billion), Thailand ($11.8 billion), Malaysia ($10.5 billion), and Vietnam ($6.6 billion),” JFC said.

JFC also said FDI in January to June was only 4.6 percent of total investments that flowed into Southeast Asian countries during the period.

The JFC is a coalition of the American, Australian-New Zealand, Canadian, European, Japanese, Korean chambers and the Philippine Association of Multinational Companies Headquarters, Inc.

The group represents over 3,000 member-companies engaged in over $230 billion worth of trade and some $30 billion worth of investments in the Philippines.

Source: www.businessmirror.com.ph