The European Union (EU), already the largest bloc of foreign investors in the Philippines, is able to double its investment in the country over the next five years to give jobs to Filipinos, but challenges the government to create a business climate that will let foreign commerce thrive.
“Economically and in terms of governance, the Philippines is making good progress and is putting itself more on the map of European companies. Today is the moment for the European Union to invest in the Philippines,” said Guy Ledoux, head of the European Union Delegation to the Philippines in a forum held in Taguig City on Tuesday.
Ledoux said the EU has invested 7.6 billion euros so far in local businesses, accounting for 30 percent of the total foreign direct investment (FDI) in the Philippines. EU investment is distributed among 600 companies employing about 400,000 Filipinos.
“These are quality investments in the sectors of energy, manufacturing, logistics, financial, pharmaceutical, construction, and ICT to name a few,” he said.
However, the envoy said such investment only represents 0.1 percent of the total EU FDI in the world. On average over the last 10 years, the EU had invested more than 334 billion euros per year outside the region. Of that amount, only 384 million euros went to the Philippines.
“Increasing this share is our challenge, but also a great opportunity, as there is so much more FDI to attract here in the Philippines, which can generate more jobs,” he said.
Ledoux said that bringing more FDIs into the country requires a number of measures that should make it attractive for EU companies to park more money here.
He acknowledges that in terms of measures to attract FDIs, the Philippine government is already doing a lot, highlighting its plans to revise the Foreign Investment Negative List, which is released every two years identifying investment areas or activities that may be opened to foreigners and those reserved to Filipino nationals.
The foreign banks bill and the Investment Act should be seen as very positive developments, allowing more investors to come to the Philippines, notably in areas of financial and professional services, retail, procurement and telecom, to create more and better jobs, Ledoux said.
“My wish is that all European companies will find their way to your country and contribute to help create jobs, bring down the unemployment and underemployment rates by creating added value to the economy. I know European companies are very interested. Let’s aim at doubling EU FDI in the next five years,” he added.
Donald Kanak, vice chairman of the EU-Association of Southeast Asian Nations Business Council, said that policies that create a thriving environment for commerce and investment will benefit most domestic and foreign companies.
“The Philippines obviously should not be just about foreign investment per se,” he said.
The government should look into sound macroeconomic policies to improve the country’s competitiveness in the areas of transparency, clear and consistently applied regulations; productive infrastructure for logistics, telecommunications and energy; investment in education and training for higher-paying jobs; and the level of security and health care, Kanak said.
“All those factors . . . improve the overall business climate, and make a better environment for long-term investment. A better Investment climate encourages greater mobilization of domestic capital, which is invested in the national economy by both domestic and foreign enterprises,” he added.