THE Joint Foreign Chambers (JFC) is hoping to see the Philippines do better in reducing business costs incurred due to high incidence of crime and violence.
The foreign chambers, in their Sixth Annual Arangkada Anniversary Assessment report, cited data from the latest World Economic Forum’s (WEF) Global Competitiveness Report, indicating that the Philippines continues to be at the bottom of reducing “business costs of crime and violence”.
According to the Arangkada report, citing data from the 2016-2017 WEF document, the Philippines was the near bottom among Asean-6 economies in shielding business from incurring costs due to crime and violence.
The private-public government office tasked to monitor the country’s overall competitiveness, the National Competitiveness Council (NCC), said the country’s rating has been consistent in previous reports, and it is up to the country’s law-enforcement bodies to improve on it.
“On the part of business, there’s very little we can do about it. Essentially, it’s a law-enforcement question. An indicator of this rising cost related to crime and violence is the number of private security groups being hired. People are investing on these, and so the cost of doing business is going up for them,” NCC Private Sector Cochairman Guillermo M. Luz said.
The business costs of crime and violence is just one among 140 total indicators that determines the country’s overall competitiveness, and yet the significance of the ranking weighs substantially from the perspective of the public, Luz noted.
“The weight [on the overall index] is not big but in people’s minds it can be important. If that is the perception that stays in people’s minds, it’s not good, regardless of the weight it has on the entire index,” Luz said.
The 2016-2017 WEF report states the Philippines got a ranking of 110 out of 138 economies on the sub-indicator of business costs of crime and violence, a downgrade from the previous year’s 92nd ranking from 140 economies. The year before, the Philippines’s ranking was at 77th spot out of 144 countries.
On the part of JFC, this declining performance can be credited to a number of factors, including the long-standing conflict between communist rebels and the government, and the historically higher-than-average crime and murder rates in the country compared to the rest of Asia.
The report also states the ongoing Marawi crisis, and the bloody antidrug campaign of the President coupled with extra-judicial killings by assassins as contributing to a less-secure image of the Philippines as an investment destination.
While foreign businesses declined to answer if the recent spike in violence in the country is likely to increase the business costs of crime and violence, they affirmed that peace and order remain a prerequisite for higher investments.
“Once the peace and order has been contained, we will make sure we bring investments there in farming and technology, but you can’t put carriage before the horse. Terrorism is present every where in the world… One thing is a fact: We will not grow at a pace we would like to see if we can’t contain the peace and order situation,” European Chamber of Commerce in the Philippines President Guenter Taus said.
Bruce Winton, president of the American Chamber of Commerce in the Philippines, added, the effect of crime and violence on adding costs varies per industry and per sector.
The Arangkada Report issued 12 recommendations on reducing the cost of business related to crime and violence, including pursuing meaningful implementation of the government’s agreement with the Moro Islamic Liberation Front, and launching a program to combat criminality, illegal drugs and corruption.