The Philippine economy continues to show impressive growth but if the country is to eventually join the Trans-Pacific Partnership (TPP) trade pact and seeks to maximize the potential of its public-private partnership (PPP) program, it would need to loosen its restrictions on foreign investment, the US ambassador to the Philippines said on Friday.
In a roundtable meeting with editors and reporters of The Manila Times, Ambassador Philip Goldberg complimented the Philippines’ robust economic performance, but said restrictions on foreign investment and ownership were not helping attract potential investors.
“If the economy opens up more there are areas through the [PPPs], through ownerships and others where the American companies could actually have a controlling interest,” he added.
However, “Not being able to have a controlling interest in enterprises discourages a lot of foreign investors,” he explained.
Goldberg suggested that the steady Philippine economy over the past several years has been paying minor dividends in attracting attention to the country’s selling points, in particular the good reputation of the country’s young, English-speaking workforce.
“The workforce is one aspect that is always mentioned” favorably by potential investors and economic analysts outside the country, Goldberg said.
Sectors with potential
When asked which sector of the country may need revamping, the US envoy noted that the mining industry may attract both American and foreign investors if given the opportunity to open up more.
“I mentioned mining because it is an area that has not seen much progress or not very open and I think the Administration has said it is not part of its priorities,” Goldberg said, acknowledging that the strong anti-mining lobby in the country also presented a challenge to expanding investment.
In addition, Goldberg noted that the Philippines may also benefit from continuing efforts to combat climate change, which will create both job and business opportunities, saying “there are ways we can make money off the green movement.”
“Several other energy companies [like]Chevron are here and are active and interested in the energy sector here,” he said.
PPP attracting interest, but…
“Clearly the biggest area of interest at the moment is the PPP [public-private-partnership] area. That’s where a lot of jobs are created and there’s continued interest in that,” Goldberg said.
The ambassador also emphasized that the US is promoting interest in PPPs, but restrictions in relation to who will be the controlling company “might be a deal breaker.”
Describing the Trans-Pacific Partnership trade agreement as an important component of the US “pivot” toward Asia and the Southeast Asian region in particular, Goldberg said that the US government, mainly through the office of the US Trade Representative (USTR) “continues to work closely with the Philippines” on issues that need to be resolved before the Philippines could join the US-led TPP.
Although Goldberg did not specify which areas of concern were being addressed, earlier statements from the USTR dating back to as far as 2012 have consistently indicated easing restrictive economic provisions as the key issue delaying the Philippines’ accession to the TPP.
“Of course, it is entirely up to the Philippines” whether to join the trade pact or not, Goldberg stressed, adding that the US would continue to assist the Philippines as long the government remained interested.
Currently, the TPP is undergoing the approval process in each of the 12 member countries that signed the full agreement on February 4. In the US, Congress must approve the agreement before the US can legally participate in it. While not offering a prediction of whether the TPP would be accepted by US legislators or not, Goldberg did point out that it is “a sensitive time” to discuss trade due to upcoming US elections, and the concerns about jobs and business displacement that are often raised by trade issues.
For the Philippines, Goldberg stressed that the next crucial question is how to sustain and make inclusive the country’s strong economic growth.
“What’s the next stage in your economic development? Do you want more foreign investments? Do you not want more foreign investments? Do you want to have more openness in the economy? These are questions you have to confront. That will be a decision that a new government here will have to take up,” Goldberg said.