Foreign chambers urge next government: Reforms crucial in attaining 10% growth

MANILA, Philippines – The Philippine economy is capable of growing at least 10 percent annually starting 2018, while foreign direct investments (FDI) could easily double should reforms being pushed by the foreign and local business community be implemented by the incoming administration, the Joint Foreign Chambers (JFC) of the Philippines said.

“A GDP (gross domestic product) of 10 percent plus per annum and FDI close to $10 or $12 billion, that’s the vision we like to achieve moving forward.  As far as GDP is concerned, when everything goes well then foreign direct investment will come in on a higher level which would then lead to more jobs,” European Chamber of Commerce of the Philippines external affairs vice president Henry Schumacher said yesterday.

“(Achieving that target) by 2017 may be too fast. New administration comes in by July and then takes up to 2017 to get going. So by 2018, I don’t see any reason why not,” he added.

But without the necessary reforms in addressing certain constraints holding back the economy, Schumacher said the JFC’s 2018 target is not going to happen.

GDP growth slowed down to 5.8 percent last year from 6.1 percent in 2014 while total net FDI amounted to $6.2 billion in 2014 and stood at $4.98 billion from January to October last year.

The JFC has been actively stating that despite the recent progress in the country, many challenges remain which the next administration would be responsible in addressing.

Among the leading challenges the group has cited are the weakness of the country’s agribusiness and mining sectors as well as congestion in which demand for infrastructure exceeds available supply.

The JFC said a critical infrastructure area for the Philippines is telecommunications in which the poor quality of broadband service disadvantages the consuming public.

“What I’m looking forward (for the next Philippine president) is not ‘what I’m going to do during my term’ but someone who thinks beyond their six years. We need something for this country more long term than that,” American Chamber of Commerce of the Philippines executive director Ebb Hinchliffe said.

For Julian Payne, Canadian Chamber of Commerce president, the top fundamental issues that should be addressed by the incoming administration are easing of restrictions on FDI, opening up of the country to international trade, and easing doing business not only for foreigners but also for Filipinos.

“With these achievements and shortcomings, the JFC hopes the succeeding administration will address these constraints. We are optimistic that the implementation of most of the expected recommendations will lead to higher levels of economic growth, FDI exceeding $10 billion annually, substantial increase in new jobs, reduced poverty and more inclusive growth,” the JFC said.   

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. whose over 3,000 members represent over $230 billion worth of trade and some $30 billion worth of investments in the Philippines.

The JFC is set to hold the 5th Arangkada Philippines forum next month which will focus on the future of the Philippine economy and identify bold reforms that can over the next decade achieve high, sustained and inclusive growth.

Since the launch of Arangkada five years ago, the JFC said it has seen great progress in the Philippines in terms of higher economic growth and credit ratings, improved international recognition, rising middle class, as well as growing BPO, manufacturing and tourism sectors.