March 15, 2011
The new British ambassador to Manila recently described the Philippines as a “key emerging power in East Asia.” The country’s “very impressive” 7.3-percent growth in 2010, Ambassador Stephen Lillie noted, has been accompanied by a marked increase in bilateral trade, with 2010 total trade between the Philippines and Britain expected to reach P70 billion.
While the British ambassador’s description of the country as a “key emerging power in East Asia may be viewed by some as overly optimistic, this isn’t the first time the Philippines has been considered a potential regional power. With its huge population, said a private think tank not too long ago, the country can attain the status of a regional power. But then, a big population does not necessarily mean a huge productive capability, especially when nearly half of our population lives on the edge of poverty.
Nevertheless, the British ambassador has expressed support for the Aquino administration’s public-private partnership (PPP) program, saying that the British embassy is “actively encouraging more British companies to participate in the bidding of Philippine PPP projects.”
“More bidders mean a more competitive bidding process that would present the Philippine government with a wider range of partnership choices,” Lillie said.
Support for the PPP program is also forthcoming from other countries in Europe and the Middle East, according to the Board of Investments (BOI).
BOI Managing Director Cristino Panlilio, who recently embarked on a two-week visit to Abu Dhabi in the United Arab Emirates, Doha in Qatar, and some parts of the European Union, said business executives from France, Spain, Switzerland and the UK will visit the Philippines before the year ends, possibly to participate in big-ticket infrastructure projects of the government.
Within this year, businesses from Europe will likely inject some $1 billion (around P43 billion) for their expansion projects and fresh investments in the Philippines, Panlilio said.
Meanwhile, businessmen from the Middle East want to invest at least $500 million in government projects, Panlilio said. “We just have to nudge them to send in more FDI [foreign direct investments] sooner,” he said. Getting more foreign funds to come in, however, may not be as simple as nudging investors to sink their money into Philippine projects.
When President Aquino was in Singapore last week, his hosts were likewise optimistic about investment prospects in the Philippines, but emphasized that for the country to draw in Singaporean investments, there must be improved security and transparency. The cochairman of the Philippines-Singapore Business Council, Choo Chiau Beng, said that “for Singapore companies investing in the Philippines, it is very critical that the law and the courts have credibility. And I would urge the President to ensure that.”
To create a probusiness environment in the Philippines, Mr. Aquino said, curbing corruption is the first order of business. That this should be the priority is borne out by the 2010 Transparency International’s Corruption Perception Index, which rated the Philippines as “highly corrupt,” ranking 134th out of 178 countries.
Encouraging private-sector participation in infrastructure development through the PPP program may be easier said than done, however, with the country’s serious peace-and-order problems. Armed rebellion, exacerbated by criminality, serves to dampen investments, especially in the countryside.
The country definitely needs more roads, railways, airports and energy projects that will open up more opportunities for foreign investments. But the government must see to it that investments are amply protected, if we want to attain the goal of becoming a “key emerging power in East Asia” in the near future.