The nation is acting on reforms proposed by investors, but more progress is needed in certain areas with the best potentials for growth, particularly agriculture and mining. This is the latest assessment of the Joint Foreign Chambers on the annual progress of their detailed proposals, first presented to policy makers in 2010, to make the Philippine economy accelerate twice as fast and generate much-needed employment.
With its focus on the fight against corruption, the Aquino administration continues to enjoy high business confidence. Last year the confidence was reflected in the country’s first ever investment grade, given by the three major international credit rating agencies.
Even administration officials, however, have acknowledged that the investment grade has not translated into job-generating businesses. The country remains a regional laggard in terms of attracting foreign direct investment. John Forbes, senior adviser of the American Chamber of Commerce of the Philippines, one of the groups that make up the Joint Foreign Chambers, noted, “Compared with what neighbors have to offer, businesses cannot afford to stay in the Philippines.â€
He was referring to lower labor and power costs and fewer non-working holidays in other countries. The problems of business groups in this country are not new. They have also cited the inadequacy of infrastructure in all aspects, ineffectual corporate regulation, red tape in doing business, weak rule of law, smuggling and other unfair trade practices, and protectionist laws and policies.
Most of their proposals do not need constitutional amendments, but others need legislation, and this can take years. Investors are supporting ongoing moves in the House of Representatives to amend economic provisions in the Constitution that restrict foreign involvement in business activities here. The results will be presented to the public in a plebiscite, so implementation of any amendment, if ratified, is also a few years away.
In two years there will be a change of government. If the Aquino administration wants to dispel criticism that what has been achieved in the past three years is jobless growth that has failed to improve the lives of the poor, more must be done to encourage the types of investments that generate meaningful, stable employment. Investors have presented some viable proposals. What is needed is more resolute action.