Cebu business leaders’ call: Prepare for investment surge
STUDY: PH BEST COUNTRY TO INVEST IN
Good news and a challenge — this is how business leaders in Cebu see the recent ranking of the Philippines as the top destination for investments in 2018.
The U.S. News and World Report, in its “Best Countries to Invest In” report released last month, named the Philippines as the number one country to invest in this year, among 80 countries worldwide.
Despite generally declining inflows of foreign direct investments (FDI) in Southeast Asia, the report said the Philippines continued to perform well based on data from the United Nations (UN).
“In years to come, the country is expected to receive more FDI from within the region from powerhouses like China that are looking to utilize available labor in developing countries,” the report read.
While welcoming the “positive marketing” from the report, Mandaue Chamber of Commerce and Industry (MCCI) President Stanley Go said the news should also be taken as a challenge by both government and the private sector.
He said the country should prepare for the expected surge of investors that may happen given this reputation gained by the country.
Among the main concerns the country needs to address, he said, are infrastructure and workforce.
“We have to prepare ourselves. Our infrastructure has to be prepared to absorb these new investments. In our infrastructure now, what’s important is connectivity and I think the government is working on that,” Go told Cebu Daily News.
Once these investments come in, the labor force in the country would be able to benefit immediately through more employment — if they are competent enough, he added.
Which is why training and improving the current labor force is also imperative.
For his part, Regional Development Council (RDC) 7 Chairperson and internationally-acclaimed Furniture Designer Kenneth Cobonpue believes the country’s people are its asset.
“It’s a good time to invest in the Philippines right now for several reasons. We have a young and dynamic workforce — 50 percent of our population is below 25 years old; we have millions of OFWs (overseas Filipino workers) returning home full of ideas obtained from all over the world; and we still have so much land to develop,” Cobonpue told CDN.
But like Go, Cobonpue also underscored the need for the business sector to help manage the country’s “rapidly increasing” economic growth.
One way of doing this, he said, is to solve pressing problems related to traffic management, infrastructure, and slow telecommunications.
The U.S. News and World Report, a digital news and information company, said many of the countries that business decision makers find “financially attractive” are in Southeast Asia.
Four out of the top five best countries to invest in are from Southeast Asia namely Philippines (1st), Indonesia (2nd), Malaysia (4th), and Singapore (5th). Poland was ranked 3rd.
Other top countries to invest in this year were Australia (6th), Spain (7th), Thailand (8th), India (9th), Oman (10th), Czech Republic (11th), Finland (12th), Uruguay (13th), Turkey (14th), Ireland (15th), Netherlands (16th), United Kingdom (17th), Brazil (18th), France (19th), and Chile (20th).
According to the U.S. News and World Report, the ranking was based on scores primarily from more than 6,000 business decision makers on a compilation of eight equally weighted country attributes: corrupt, dynamic, economically stable, entrepreneurial, favorable tax environment, innovative, skilled labor force, and technological expertise.
The company also pointed out a World Bank Group report that a country’s people, environment, relationships, framework, and teachings create four distinct factors that motivate an individual or corporation to invest in a country. These are: natural resources, markets, efficiency, and strategic assets like technologies or brands.
‘Vote of confidence’
For newly-elected Cebu Chamber of Commerce and Industry (CCCI) Antonio Chiu the Philippines’ being named as a top investment destination is a “strong vote of confidence” for the country and the administration of President Rodrigo Duterte.
He also pointed out how the country is one of the few in the world which has sustained a gross domestic product (GDP) growth of over 6 percent over the past several years.
“Poverty has been significantly reduced and the purchasing power of the people has increased. These are clear signs that the economy is doing well in spite of declining FDIs,” Chiu told CDN.
Meanwhile, MCCI’s Go also agrees to the report on the prospects of Chinese investors coming into the country.
He pointed out that this has been the clear policy of the Duterte administration — to “befriend” China.
“Maybe that will play a big role in bringing additional FDIs. I think it’s because of the policy of government of befriending China which is a very big opportunity,” Go said.
He added that one immediate manifestation of this is the growing number of Chinese tourists coming into the Philippines in general and Cebu in particular.
With this, Go said, investments from China would also follow.
The UN Conference on Trade and Development’s (UNCTAD) World Investment Report 2017 stated that countries like the Philippines, Bangladesh, and Nepal are expected to receive more FDIs in the coming years, especially from within the region.
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