The Joint Foreign Chambers (JFC), the country’s largest coalition of foreign investors, acknowledged a significant improvement in the country’s competitiveness over the last four years, but stressed the need for further reform that could ensure inclusive growth.
At the fourth edition of the “Arangkada Assessment Forum” at the Shangri-La Hotel Makati on Tuesday, the foreign investors called on the government to implement policies that will enhance the environment for jobs to flourish with a better educated, healthier, secure workforce, as well as modern infrastructure and a supportive rather than burdensome regulatory regime.
Adopting the theme “Invest NOW for Inclusive Growth Now!” this year’s Arangkada Assessment highlighted the following critical areas where reform is deemed necessary to achieve inclusive growth:
Creating a sound investment climate through regulatory and policy coherence; enabling the middle class through equitable participation and larger share in economic activities; promoting trade and investment liberalization and creating a level playing field for investors; providing opportunities for gainful employment especially for the young labor force; and, supporting integrity, transparency, judicial reforms, anti-corruption and peace initiatives.
“Looking back at 2014 there was good news for future inclusive growth: GDP growth of 6.1 percent was one of the highest in the region; domestic and foreign investment was rising; international credit and competitiveness ratings improved; BPO, construction, manufacturing and tourism were strong growth drivers; 2.5 million Filipinos escaped extreme poverty; and unemployment fell to 6 percent, the lowest in a decade,” Rhicke Jennings, president of the American Chamber of Commerce in the Philippines (AmCham) said.
Legislative wish list
“If we truly wish to institutionalize the gains of the last 56 months, the most critical among these is the Freedom of Information Bill, which I continue to hope will finally pass at the House of Representatives this year as promised by no less than Speaker Belmonte,” said Ramon del Rosario Jr., chairman of the Makati Business Club (MBC).
“Next, I would like to strongly reiterate our call to amend the restrictive economic provisions of the Constitution as embodied in House Resolution No. 1 by Speaker Feliciano Belmonte. This amendment will give Congress the flexibility to determine which areas of the economy should be opened to increased foreign participation based on thorough deliberations from the committee level to the plenary,” del Rosario said.
“The Philippines is among the very few nations with specific economic restrictions lodged into its constitution, whereas a large number of countries subscribe to the principle of allowing their legislatures to determine economic policy. There is no better time than now to accelerate the process of opening up our economy as we host the annual meeting of APEC, which champions policies of open markets and enhanced investments and trade among its member economies,” he added.
Del Rosario also believes that engaging in economic Charter Change will be beneficial for the medium and long term, especially in this period of Asean integration and the improved attractiveness of the Philippines as an investment destination.
Significantly, greater openness in certain sectors is a prerequisite to joining high-level agreements such as the Trans-Pacific Partnership (TPP), he said.
“The public sector is the enabler of job growth, while the private sector is the engine. The two must work in parallel for inclusive growth and job creation,” foreign chamber leaders emphasized. For its part, the JFC said, the “private sector is doing its share and is ready to do more to improve inclusive growth through investing. Various firms generously support a wide range of socially responsible and economically oriented activities, especially in education, health, housing, and disaster relief and recovery.”
The JFC also urged both public and private sectors to work together in charting a long-term roadmap that will enable the Philippines to move up the global business and competitiveness ladders, especially with the advent of the Asean integration and other forthcoming FTAs such as the TPP.
The Arangkada Forum stressed the need to ensure a conducive investment environment to help accelerate growth in seven key sectors—agri-business, business process outsourcing, creative industries, mining, manufacturing, tourism, and infrastructure.
These sectors are identified as drivers and winners of economic transformation where a large percentage of the population is expected to benefit from the opportunities derived from enhanced integration with the rest of the world.
The JFC believes that specific targets have to be realized to support inclusive growth in the next years.
These include GDP growth accelerating to 8 percent; overall investments increasing from 19 percent to 30 percent of GDP; foreign direct investment (FDI) increasing from $6 billion to $10 billion; public sector infrastructure spending reaching at least 5 percent of GDP; re-orienting policy focus to agricultural, creative industries, and mining sectors to accelerate growth especially in rural areas; ensuring peace and order in Mindanao; and, increasing gainful employment opportunities to bring down the unemployment rate to below 5 percent and reducing poverty to 18 percent by 2016 consistent with the Millennium Development goals.
The JFC reaffirmed the need to institute a free, open and competitive business environment that promotes a level playing field for all investors.
“For the Philippines to make growth more inclusive, successive presidential administrations should undertake reforms that sustain and increase GDP growth. This will require continued good governance, political will to undertake more structural reforms, better infrastructure, a fair regulatory regime, and better business costs, among others” JFC leaders stressed.
Arangkada Philippines is the major advocacy—launched in 2010—of the Joint Foreign Chambers (JFC) to increase investment and employment in the Philippines by September 2016. These goals are contained in its main policy document “Arangkada Philippines 2010: A Business Perspective.” Arangkada is funded by a $1-million grant from the US Agency for International Development (USAID) and is administered by the American Chamber of Commerce of the Philippines Inc.
The JFC— the largest coalition of foreign investors composed of the American, Australian-New Zealand, Canadian, European, Japanese, and Korean chambers of commerce as well as the Philippine Association of Multinational Companies Regional/Operating Headquarters Inc.
(PAMURI)—promotes enhancement of mutual trade and investment relations between the Philippines and the countries of its seven members. Over 2,000 firms belong to the seven JFC member chambers, contributing substantial investment, jobs, and tax revenues to the Philippine economy.