Local businessmen belonging to the Philippine Chamber of Commerce and Industry (PCCI) said the credit upgrades obtained by the Philippines will not mean anything if the government will not be able to take full advantage of it to resolve chronic poverty and lack of jobs.
PCCI, the largest umbrella organization of businesses in the country, urged the government to “do more” in resolving the twin problems of poverty and job generation. Citing findings by the National Economic and Development Authority and the National Statistical Coordination Board on poverty incidence, the group noted the lackluster performance of the Aquino administration in reducing poverty in the country.
“At the end end of the day, all investment upgrades we generate will be useless unless we translate these into specific employment opportunities that increase the potential of our communities to become productive agents, thereby reducing poverty incidence in the country,” said PCCI President Miguel Varela.
Last week international rating firm Standard & Poor’s (S&P) granted the second investment-grade rating to the Philippines. The first one was given by Fitch Rating in March.
The group noted that the S&P upgrade, which was released before the midterm election on May 13, is an affirmation of the economy’s “bullishness.” PCCI said this gives premium to the kind of confidence that the international community has placed on the Philippine economy regardless of a forthcoming political activity viewed in the past by analysts as a “risky process.”
“It is pleasantly surprising to get this upgrade at the height of the election season, only because in the past, any political activity we undertake can be subjected to market speculation resulting in investment risks or even uncertainty.”
These credit upgrades, the PCCI said, should be used by the government as “leverage” to attract more foreign direct investments which could create more business opportunities for micro, small and medium enterprises (MSMEs) and create more jobs especially in rural areas where poverty is endemic.
To encourage the entry of more foreign investors, Varela suggested the need to revisit regulations that hinder investor confidence and adopt policies that encourage long-term investments especially in agriculture and manufacturing.
The group also called for measures that would reduce the cost of doing business in areas related to power and utilities, raw materials sourcing and business licenses.
“We need investors not just to invest their money, but to stay and expand their operations—support the value chain activities of our agriculture and manufacture industries and open opportunities for MSMEs to be part of their supply chain,” said Varela.
“We can only achieve this if we look into specific reforms that will support the broader participation of inestors in our now-recognized resilient and stable economy,” he added.
In a position paper released in May last year, foreign businessmen belonging to the Joint Foreign Chambers noted that foreign direct investments have shied away from the Philippines where minimum wages are high.
Source: Jennifer A. Ng, Business Mirror. 7 May 2013.
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