Philippines struggling for investment

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The Philippines have highly-skilled, English-literate human resources, but a lot of red tape for foreigners to start up a new business

Discouraging results in the latest “Ease of Doing Business 2013” ranking by the World Bank and a sluggish foreign direct investment inflow in 2012 have alarmed Philippine officials to push ahead with macroeconomic reforms as quickly as possible.

The World Bank report has put the Philippines138th on a scale of 1 – 185 countries, 2 notches worse than in the 2012 report and worst among the other ASEAN-5 countries Malaysia, Indonesia, Thailand and Singapore.

Of the ten ASEAN countries, Malaysia ranked 12th in the report, Thailand 18th, Brunei 79th, Vietnam 99th, Indonesia 128th, Cambodia 133rd and the Philippines 138th, only followed by Laos at 163rd place. Myanmar is not in the survey. See our report Singapore remains best in business.

The ranking also showed that starting a business in the Philippines is one of the most complicated in the world, ranking 161 out of 185.

The Philippines government said in a response that “reforms are now in place that make the Philippines attractive to investors.”

“… We have already started the one-stop processing center and we have more interest in the Philippines… [Investors] are eyeing the Philippines as an investment haven,” Presidential Spokesperson Edwin Lacierda told reporters in a briefing on October 24 in Manila.

However, the Philippines also continues to lag behind its ASEAN neighbours in terms of foreign direct investments (FDI) even as it saw an increase in the first half of 2012, the United Nations Conference on Trade and Development said on October 23.

FDI inflows into the Philippines totaled $900 million from January to June, 12.5 per cent up from the comparable 2011 period. It was small, however, compared with Singapore, which had the highest FDI in the region at $27.4 billion, or Indonesia ($8.2 billion), Thailand ($5.6 billion) and Malaysia ($4.4 billion). FDI into Cambodia was at the same level as the Philippines, but the country enjoyed a much faster 166 per cent year-on-year FDI growth.

“Foreign investors  are unimpressed with the reforms – or lack of them – by the Aquino administration,” former Philippines budget secretary Benjamin Diokno told media.

He added that FDI inflows in the first three quarters of the year are  not consistent with the image that the Philippine government is trying to project.

“The Philippines need to attract much higher levels of FDI in order to achieve its goal of sustained, inclusive high growth rates,” Diokno said.

 

 

 

 

 

 

 

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Reading Time: 2 minutes

The Philippines have highly-skilled, English-literate human resources, but a lot of red tape for foreigners to start up a new business

Discouraging results in the latest “Ease of Doing Business 2013” ranking by the World Bank and a sluggish foreign direct investment inflow in 2012 have alarmed Philippine officials to push ahead with macroeconomic reforms as quickly as possible.

Reading Time: 2 minutes

The Philippines have highly-skilled, English-literate human resources, but a lot of red tape for foreigners to start up a new business

Discouraging results in the latest “Ease of Doing Business 2013” ranking by the World Bank and a sluggish foreign direct investment inflow in 2012 have alarmed Philippine officials to push ahead with macroeconomic reforms as quickly as possible.

The World Bank report has put the Philippines138th on a scale of 1 – 185 countries, 2 notches worse than in the 2012 report and worst among the other ASEAN-5 countries Malaysia, Indonesia, Thailand and Singapore.

Of the ten ASEAN countries, Malaysia ranked 12th in the report, Thailand 18th, Brunei 79th, Vietnam 99th, Indonesia 128th, Cambodia 133rd and the Philippines 138th, only followed by Laos at 163rd place. Myanmar is not in the survey. See our report Singapore remains best in business.

The ranking also showed that starting a business in the Philippines is one of the most complicated in the world, ranking 161 out of 185.

The Philippines government said in a response that “reforms are now in place that make the Philippines attractive to investors.”

“… We have already started the one-stop processing center and we have more interest in the Philippines… [Investors] are eyeing the Philippines as an investment haven,” Presidential Spokesperson Edwin Lacierda told reporters in a briefing on October 24 in Manila.

However, the Philippines also continues to lag behind its ASEAN neighbours in terms of foreign direct investments (FDI) even as it saw an increase in the first half of 2012, the United Nations Conference on Trade and Development said on October 23.

FDI inflows into the Philippines totaled $900 million from January to June, 12.5 per cent up from the comparable 2011 period. It was small, however, compared with Singapore, which had the highest FDI in the region at $27.4 billion, or Indonesia ($8.2 billion), Thailand ($5.6 billion) and Malaysia ($4.4 billion). FDI into Cambodia was at the same level as the Philippines, but the country enjoyed a much faster 166 per cent year-on-year FDI growth.

“Foreign investors  are unimpressed with the reforms – or lack of them – by the Aquino administration,” former Philippines budget secretary Benjamin Diokno told media.

He added that FDI inflows in the first three quarters of the year are  not consistent with the image that the Philippine government is trying to project.

“The Philippines need to attract much higher levels of FDI in order to achieve its goal of sustained, inclusive high growth rates,” Diokno said.

 

 

 

 

 

 

 

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