Although foreign investors have expressed their desire to put up hard investments in the Philippines, the country is just not ready for it.
This was the sentiment shared by experts in academe and private sector in the recent ADR Institute discussion on the role of exports and foreign direct investments (FDI) in the country’s development in Makati City.
The think tank, which specializes in strategic and international studies, described the country as “half-open” for investment inflows, particularly from foreign players.
“The limits set by the country’s Constitution on foreign equity in real estate and in key industries have set up a half-open and restrictive business environment that has frustrated the influx of much-needed FDI,” ADR Institute said.
It added that if the Philippines is to promote itself as an investment destination, the country must bring its regulations to global standards. And relaxing the foreign-ownership rule is key among these.
“We really are not friendly to foreign investors,” University of the Philippines School of Economics Prof. Ramon Clarete said, citing instances of confusing and incoherent government regulations.
He also said the country’s corporate income-tax rate is the highest in the region.
“We hear the market [players] always say the tax rates in the Philippines are not competitive,” said Clarete, one of the discussants in the forum.
Likewise, Philippine Institute for Development Studies President Gilbert Llanto said that even though incentives and special pocket areas for development are being built in the country to attract FDI, foreign investors are still hesitant, as the majority of the human-resource pool are still in Metro Manila, which is—as described by some experts—already heavily congested.
“This country knows what needs to be done. We just have to do it,” SGV & Co. Head of Tax and General Counsel Wilfredo Villanueva said.
The Bangko Sentral ng Pilipinas reported earlier that April FDI inflows declined by 43 percent compared to the same period in 2014.
4 comments
You know what is pushing back the country to amend this investment restrictions? The oligarchs ruling this country who benefit in the current system.
Our economy is so restrictive to foreigners because our leaders lack the political will to question the leftists and communists fanning the flames of an obsolescent philosophy demonizing all foreign investors as imperialist devils. Come on, now, the fact that the *real* Communists like China and Vietnam now promote once-despised capitalism shows that they have accepted the reality, while our government falls for the 60s-era anti-foreigner line, Apparently, populism for winning pogi points is more important than our economic future. It’s time we showed our resolve and guts.
We must really support changing economic provisions in awfully
outdated 1987 charter.
Biruin mo, 43% ang ibinaba ng FDIs compared last year. That’s an indication that foreign investors’ confidence to take the risk with Philippines is withering at an increased rate. The government knows exactly what to do but they are dictated by the leftists who do not understand what they’re protesting about. They’re actually hindering the growth of the Philippine economy and the government officials are even feasting out of their ignorance for the sake of political interests.