The Philippines must first address several issues such as its reputation for corruption before it can attract more foreign direct investments, according to British Ambassador to Manila Stephen Lillie.
Lillie identified four challenges that the Philippine government must begin addressing in order to draw investors—unstable power supply, high corruption rate, reputation of bureaucracy and lack of infrastructure.
He said these issues hinder economic growth and gives the Philippines a bad reputation.
“There are things that put people off. There is [an incorrect]reputation of corruption and democracy and infrastructures,” the envoy told The Manila Times.
“There’s a bit of a gap . . . Investors here are very happy with their experience in the Philippines. I hardly ever meet a dissatisfied investor. Those who are here are pleased with their experience to do business,” he said.
Although present British investors are generally satisfied with the way their businesses are growing in the country, some misconceptions about the Philippines linger, Lillie said.
“The Philippines is missing out. There’s still a lot of people who never really look at the Philippines in the first place. They have an image of the Philippines that is not necessarily correct, not up to date. They look for other places,” he added.
The absence of direct flights to the country because of the European Union ban on Philippine carriers also affect the influx of businessmen in the country.
Compared with other Asian cities like Bangkok, it is more difficult to go to Manila because of the need to change flights, the Lillie pointed out.
But the Philippine government is making progress especially after it acquired its first investment grade from financial institutions such as Fitch and Standard and Poor’s.
“I do hope in the coming years, we’ll see more investors coming in,” Lillie said.
Because of its new investment rating, it is possible the country will see more fund managers taking a serious look at the Philippines, he said.
“This is a positive sign. Usually, we see more portfolio investments before foreign direct investments. But more people are starting to invest in Philippine companies,” Lillie said, referring to industries such as business process outsourcing and manufacturing companies.
He cited the entry of large British firms such as STI (Surface Technology International) in Cebu City, which manufactures “high-value electrical circuit used in different control systems,” and another company based in Batangas which makes the galleys for airplane kitchens.
He also cited the decision of Bentley and Rolls Royce to target Philippine car consumers.
Aside from these new companies, British firms like Shell, Marks and Spencer, Topshop/Topman and The Body Shop are still operating in the Philippines.
But despite the issues apparently clouding investor confidence in the Philippines, Lillie also said there is a growing interest among British firms to enter the local market.