The Philippines Star, 9 July 2015. Vietnam overtaking the Philippines, by

An edited extract of the original article is reproduced below.

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Our economy seems to be doing well with an impressive growth rate at over six percent last year…

Everybody knows that a major contributor has always been the remittances from our overseas Filipino workers that amounted to almost $27 billion last year. But there is no question that we could do much, much better if we attract more foreign investments into the country by lifting the overly protectionist provisions in our Constitution. A report by the Economic Research Institute for Asean and East Asia (ERIA) affirmed that the Philippines has one of the most restrictive policies compared to its neighbors. As a matter of fact, the inflow of FDIs was reduced to almost half for the first three months to $851 million compared to the $1.75 billion covering the same period last year.

A recent report released by the UN Conference on Trade and Development (UNCTAD) noted the Philippines continues to lag behind its ASEAN neighbors such as Singapore whose FDI reached $67.5 billion – over 10 times more than what the Philippine managed to attract. Most of our neighbors are hitting double digits and even Vietnam has overtaken us with a steady increase in FDI inflows from $7.6 billion in 2009 to $9.2 billion last year. In contrast, the Philippines only managed to attract $6.2 billion in 2014…

Businessmen are definitely concerned especially with the decision of Vietnam to lift ownership caps on listed companies – a move obviously designed to attract and encourage the inflow of more foreign business and investments. But all is not lost, as the Philippines has a fighting chance to keep pace with – if not outpace – our neighbors including Singapore.

That is, if policymakers and lawmakers are serious enough to enhance the local business environment that has largely been perceived as hostile to investors and investments. Aside from poor infrastructure, high taxes and an unpredictable policy climate as seen in government’s tendency to change rules midstream and renege on contracts made with the private sector, a major turn off for the international business community is the over protective Constitution…

 

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