Why foreign and local entrepreneurs should invest in the Philippines now

Both admirers and critics of President Rody Duterte acknowledge that there is fast momentum of real change and reforms now. In fact, I hear a lot of businesspeople saying that this new administration marks the possible start of a new golden era for foreign and local investors to expand business operations in the Philippines. Here are some reasons why they should invest now:

• Charter change is coming on economic provisions. Moves to finally go forward in reforming the Philippine constitution can bring our investment policies up to par with or even more welcoming than those of our neighbors in ASEAN and Asia, thus boosting the profitability prospects for foreign and local investors. Let us woo more long-term businesses like factories or tourism ventures, not just so-called “hot money” investments.

Negros Occidental Rep. Alfredo “Albee” Benitez, the country’s formerly second wealthiest member of congress next to Manny Pacquiao (now a senator), told me that he and many legislators and businessmen support President Duterte’s Charter change plans, especially the archaic and restrictive economic provisions. Benitez is co-host of the ANC TV show Game Changer, along with his son Javier “Javi” Lopez Benitez.

• Lower taxes on business and personal incomes. Right now, we have among the highest business and personal income tax rates in the region. Reforms to lower these high tax rates will not only  boost the attractiveness of doing business in the Philippines for foreign and local investors, it will free up more disposable income among the citizenry and thus boost our consumer spending. I encourage foreign and local investors to already position themselves here in the Philippines, to start businesses or expand before this renewed economic boom.

• Better peace and order. Drastic improvement in peace and order will boost tourism, and thus offer great opportunities for foreign and local investors to expand or go into resorts, hotels, spas and other tourism-related businesses. Dr. James Dy of Pan Pacific Travel Corp., who recently received the PAL Gold Elite Award, said, “If we enjoy a better peace-and-order situation under the reforms of President Duterte, the Philippines will enjoy a golden era of unprecedented growth in the tourism industry.”

Buhay Partylist Congressman Lito Atienza recently told me that he didn’t campaign for Duterte and was actually disappointed that he won decisively as the new president, but this senior minority leader now admitted to me that he is very impressed by President Duterte’s anti-drug and anti-crime campaign. Atienza said, “Better peace and order is good news for the Philippine economy. I am in the opposition in congress, but I am pleasantly surprised and very impressed by President Duterte’s political will to solve the illegal drugs and crime problems. I realize now that it is only Duterte who could do this; not even past presidents have tried to do what he is doing now to end the illegal drugs menace, which will woo investors and tourists.”

• Massive infrastructure spending. The brilliant and incorruptible Budget Secretary Benjamin Diokno, a graduate of Johns Hopkins University and Syracuse University, said the new Duterte administration plans to spend as much as seven percent of the Philippines’ gross domestic product (GDP) for “pure infrastructure” projects within the next six years, beginning with a proposed P890.9 billion next year. Wow! Better infrastructure is a catalyst not only for economic growth, but can help economic democracy by spreading the fruits of development to far-flung rural areas of the Philippines. It will fulfill President Duterte’s dream of accelerating rural countryside development in once-neglected regions of the archipelago, thus unlocking their huge agricultural, industrial, tourism and resource potential. His plan to build modern high-speed trains all over the country should encourage the most astute foreign and local investors to start positioning themselves by studying, opening or expanding businesses in all parts of the archipelago.

• Diplomacy reforms will boost the economy.  Philippine ties with our traditional ally and the world’s biggest economy, the US, will hopefully remain good under President Duterte, even as his wise reforms in foreign policy seem to indicate high hopes for normalizing and repairing crucial bilateral ties with the world’s second largest economy, China. We have been lagging  behind all our ASEAN competitors in economic engagement with China in recent years.

In diplomacy reforms, maybe we will also start importing oil from Iran, just like American allies South Korea and Japan have been doing nonstop during the recent US-led trade sanctions on Iran.

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Thanks to China diplomacy expert Chito Sta. Romana of the Philippine Association for Chinese Studies (PACS) and Jinan University Professor Fan Dai for inviting me to talk at their symposium on how to improve the Philippine-China dialogue held at the Edsa Shangri-la Hotel. Various experts pointed out the numerous common economic, strategic, anti-terrorism and security interests of both countries and how we are traditional ancient friends, hoping the new Duterte administration’s foreign policy reforms will benefit the Philippines economically.

Incidentally, Sta. Romana accompanied West Point-educated former President Fidel V. Ramos on his recent ice-breaking diplomacy talks with top China officials in Hong Kong. He met with Madame Fu Ying, chair of the foreign affairs committee of the National People’s Congress  —  China’s  legislature. Fu Ying is also an old friend of the Philippines, having served as former ambassador to Manila. FVR also met with also met with Wu Shichun, president of China’s National Institute of South China Seas Studies. If bilateral relations are restored and normalized, the workaholic ex-President Ramos will become a hero of Philippine diplomacy and progress, hopefully gaining us more economic benefits.

In my talk, I mentioned that a South Korean tycoon told me that despite his country’s longstanding disagreements with China on political ideology, on North Korea and even on the continued US military presence in the Korean peninsula, Korean leaders’ pragmatic focus on strengthening bilateral win-win economic, trade and diplomatic ties with Beijing have even made South Korea benefit from China more than Taiwan does. Our other ASEAN neighbors — Thailand, Indonesia, Malaysia, Cambodia, Singapore, and Myanmar — have also benefited in recent years from huge Chinese tourism, investments, trade and infrastructure flows into our region, and I said we shouldn’t be left out of this unprecedented boom.

In the case of China’s newly established Asian Infrastructure International Bank (AIIB), this is good news not only for the Philippines but for all of Asia. Before, developing countries only had the Western-controlled World Bank and IMF, as well as the Japan-led Asian Development Bank (ADB) as our top sources of financing, but the more lending institutions the better for us capital-strapped borrowers. The more options and the more competition, the better for us in developing nations like the Philippines.

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