WHILE being upbeat on the Philippine economy, foreign business leaders are also wary about the bottlenecks on the road to recovery that the government needs to remove.
Chris Nelson, executive director and trustee of the British Chamber of Commerce of the Philippines, said his group is “very much optimistic for the Philippines,” but “obviously inflation is still a concern because that directly impacts the consumers.”
“We have to remember that the Philippines is a very consumer-driven economy,” Nelson said during The Manila Times Roundtable interview on Friday. “But it is good that as of this time the pace has significantly strengthened.”
He stressed that inflation “will definitely impact” the pace of consumerism.
For Nelson, the conclusion of the Duterte administration moving into the start of President Ferdinand “Bongbong” Marcos Jr.’s government “was generally a good start.”
He pointed to proposed laws that were passed during the past administration, such as the amendments to the Retail Trade Liberalization Act and the Foreign Investment Act “that were all very good trends.”
“We were very supportive of these measures because these are the things that we would like to see continue going forward to allow the Philippine economy to fully open up. We need these laws to be fully implemented,” he said.
He particularly would like to see the ratification of the Regional Comprehensive Economic Partnership (RCEP).
The world’s biggest free trade deal, the RCEP came into force on Jan. 1, 2022. Over a decade in the making, the RCEP was introduced at the Association of Southeast Asian Nations (Asean) summit in Bali, Indonesia, in 2011.
Another roundtable participant, Italian Chamber of Commerce in the Philippines Executive Director Lorens Ziller, said that he was also upbeat on the economy.
Ziller noted that Moody’s and the World Bank have tagged the Philippines as the fastest growing economy in Southeast Asia “which we kind of expected from a democratic point of view and the drive the Filipinos have to come back after the pandemic.”
“It is true, inflation is a little bit of a concern, as we have seen the onions in the country have the highest price compared to the rest of the world. So, that is something that should make us think why. Some say there is a cartel behind it. Well, I do not know. Anyway that is part of the inflation, I guess,” he said.
Nevertheless, Ziller said compared to the Duterte administration, President Marcos has opened up the Philippines to the world.
Marcos “is very outgoing, and that is a very positive thing. I think he has done all the right things so far, and we hope he will continue like this,” he added.
One primary concern is the government’s digitalization program, which has encountered “bottlenecks” particularly in the Internal Revenue and Customs bureaus.
“I think there has been certain resistance to digitalization,” Ziller said.
He said foreign business groups are very willing to help remove the bottlenecks.
Nelson said this problem affects the efforts to make doing business with the government easier.
“The government should be able to allow people to set up and do business quickly. They have to figure out how to shorten the time frame in setting up businesses in the country. This will definitely help in making the Philippines an investment destination,” he said.
If the government wants to move things “you have to move it quick[ly],” he said.
“What the people really want is speed,” Nelson said. “The Philippines needs to keep up the momentum because you have to appreciate that it’s a very competitive environment out there.”
Nordic Chamber of Commerce of the Philippines Executive Director Jesper Svenningsen shared Ziller and Nelson’s optimism, and believes that the Philippines is a good destination for companies from Denmark, Finland, Norway and Sweden.
Svenningsen said President Marcos’ talk on promoting e-governance is “something we are really looking forward to as this will make things more transparent, less red tape.”
“That is something we really hope to see implemented fully in 2023,” he said.
The Nordic countries are “all champions in e-governance processes and we would be very happy to share our knowledge with the Philippine government,” he said.
“We are the leading country in the aspect of e-governance and we certainly know that it takes a long time; it is not something you are able to do in a day. It’s really an ongoing process. In the Nordic countries it’s been going on for more than 10 years now, so we are willing to share our experiences and just reach out to us,” Svenningsen said.
He said that the Philippine government should understand what foreign companies need to stay longer in the country.
“Bottlenecks should be removed; the government should do away with more sets of hurdles,” Svenningsen said.
He also said the Philippines should move to renew the European Union Generalized System of Preferences Plus (GSP+).
GSP+ gives developing countries a special incentive to pursue sustainable development and good governance. Eligible countries have to implement 27 international conventions on human rights, labor rights, environment and good governance.
“GSP+ needs to be extended. That has to be done because this will really benefit the Philippines,” Svenningsen said.
Nelson also noted the importance of consistency in implementing laws governing business and investments, particularly on contracts being awarded.
“The rule of law has a huge impact in foreign investments. The government should make sure that rules do not change in the middle of the game. We need more certainty,” he said.
While welcoming improvements in implementing economy-related laws, “constitutional changes with respect to foreign investments are only needed when what is being removed are those that are bad for business,” Nelson said.
“To me, the real point is how can the Philippines focus on what it does best, what are its advantages to others and how can it improve those to make people come here,” he said.