Israeli investors ready to do business with Filipinos, but not in PHL

In Photo: Israel’s Ambassador to the Philippines Effie Ben Matityau (right) answers questions from reporters of the Aliw Media Group during a forum held at the BusinessMirror office in Makati City. With him are (from left) BusinessMirror Publisher T. Anthony C. Cabangon and Jewish Association of the Philippines Rabbi Eliyahu Azaria.

The “unpredictable” business environment and foreign-ownership cap in certain sectors in the Philippines have been forcing Israeli investors to delay their plans to establish operations in the country, according to Ambassador of Israel to the Philippines Effie Ben Matityau.

Speaking at the BusinessMirror Coffee Club Forum on Wednesday, Matityau said there could have been more Israeli investors doing business in the country today, if not for the foreign-ownership cap mandated under the Constitution. He listed predictability as their main consideration before they invest in a country.

“Yes, that has to [change],” Matityau said, referring to the restrictions on foreign ownership, “especially if you want to do business inside the Philippines. It is a very, very serious issue because you do not have total control of your business.”

“The legal environment and everything that has to cater to foreigners, you do not have much remedies. Without these remedies, the whole environment is not conducive enough,” he added.

Israeli investors have long targeted the Philippines, but Matityau said the foreign-ownership cap had a good number of businessmen eliminating the Philippines from their list of possible investment locations.

In 2016 investments from Israel dropped by 60.66 percent to only P10.45 million, from P26.56 million in 2015. Matityau owed this to unpredictability of the country’s business environment.

For the top envoy, this has to be reformed because the Philippines is losing opportunities that could have easily fallen on its feet. “You look at your business environment, and investors would look at where they find themselves in the most comfortable position.”

“It is an environment issue. Manila has a very, very serious business environment, so you end up with a very serious business community. That appeals very much to foreigners: that you talk to serious people; the language is a major advantage; the cultural connection is a major advantage. It is much easier doing business [here] than in any countries in the region, like China and Vietnam, because there is a cultural barrier,” Matityau added.

He also took note of the bureaucratic processes an investor has to undergo just to establish a business in the country. “You have a structural and legal environment that has to change to cater to more foreign investors [because] these people want faster investment
protection,” he said.

The government is currently on its heels improving the country’s ease of doing business, especially with the Philippines sliding 14 notches to 113th in the Doing Business Report of the World Bank. The report measures the ease of doing business across 10 processes that a firm must accomplish over its average life cycle.

If the government is truly eager to attract more investments, Matityau has this recommendation: “The Philippines has to also follow this path: integrate with the [Southeast Asian] region, ease up a little bit the regulations, make it easier for businesses to come and invest really without the risk of being exposed too much to the unknown.”

Matityau said Israeli investors are keen on doing business in the Philippines, given the long history of cooperation between Jews and Filipinos. During the rise of the infamous dictator Adolf Hitler, the Philippines allowed more than 1,300 Jews to take refuge in the country.

The envoy said Israel will always be grateful to the Philippines for that act of solidarity. “Doing business with Filipinos is easy. It is just that doing business inside the Philippines is not,” he said.

Trade activities between the Philippines and Israel saw its figures rise by 22.33 percent to $183.77 million in 2016, from $150.22 million in 2015. This made Israel the country’s 37th top trading partner among 226 countries and territories.

Image Credits: Alysa Salen

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