Phl must stand out from regional competition to attract more investments from EU

MANILA, Philippines - There is no reason why the Philippines should not be among the top trading partners of the European Union (EU) in the Association of Southeast Asian Nations (ASEAN), an official from a European business group said.

Companies in the EU “want to increase the level of business we are enjoying” in the Philippines, assured Martial Beck, vice president and general manager of the European Chamber of Commerce of the Philippines (ECCP).

But to attract more EU investments to the Philippines, “both must convince each other they are the right business partners,” Beck said, who was one of the speakers at the recent 40th Philippine Business Conference & Expo held in Manila.

It is possible for the Philippines to become one of the top three destinations in ASEAN of foreign direct investments (FDIs), instead being “near the bottom” as it is now, he further said.

He said the Philippines can do many things to stand out from the regional competition and raise its exports to the EU, including improving packaging, making prices competitive, and focusing on value-added products.

More important, Filipino exporters should take advantage of the EU’s GSP+ program, the new Generalized Scheme of Preferences arrangement granting the full removal of tariffs on many products from developing countries for export to the economic bloc. Beck said the decision on the Philippines’ application for GSP+ recognition is scheduled for release by the European Commission by the end of this year.

Particularly advantageous for the Philippines is that Thailand and Malaysia will no longer be covered by the GSP+ deal, so there are two less competitors for a share of the EU market, he added.

Beck said that FDIs will increase if the country liberalizes the economic provisions of the Constitution and passes the competition law, saying that “healthy competition is good not just for consumers but also for business.”

Other measures the Philippines can take are to rationalize the “promised” fiscal incentives to investors and modernize the Bureau of Customs.

Corporate senior director Asa Larsson of Asia Deutsche Post DHL agreed on the importance of improved and simplified customs procedures to facilitate trade and investments as well as raise the competitiveness of small and medium-sized enterprises (SMEs).

Larsson, who spoke at the same conference, said that local SMEs are especially “vulnerable” to barriers to trade.

An extra day in transit, she pointed out, due to lengthy customs requirements incurs for them added costs of between two percent and 20 percent.

The country needs to be integrated into the global trading system, now marked by a network production system that promotes the free movement of goods across borders. The Philippines must strive to become part of this new trading landscape by increasing efforts toward customs transparency, simplification, and harmonization, she added.