Corruption rate eases in Phl but actual FDIs remain low

CEBU, Philippines - Cebuano business leaders welcomed the country’s recent showing in the global corruption survey, although they admitted more work is yet to be done to convert this good news into actual foreign direct investments (FDIs).

In a phone interview, Cebu Chamber of Commerce and Industry President Lito Maderazo said the Aquino administration has given a good reputation of curbing corruption, which may positively change the way the international community sees the Philippines as an investment destination.

Maderazo believes the impressive growth posted by the country is perked up by the drive to eradicate dishonesty in the government.

In the Corruption Perceptions Index for 2013 made public a few days ago, the country rose 11 notches from 105th in 2012 to 94th this year out of 177 participating countries and territories. Additionally, the Philippines scored 36, a climb from its rating of 34 the previous year.

The Bangko Sentral ng Pilipinas (BSP) last month also reported that net FDI in the country increased 123 percent year-on-year to $143 million in August 2013.

The significant rise in investments into the country reflects the positive outlook of investors on the Philippines' economic prospects in spite of challenging global economic conditions, the BSP said in a statement.

“But then again, we have to do more,” Maderazo stressed.

He said while the Philippines continues to enjoy good economic publicity, FDIs to the country remain low compared to its Southeast Asian counterparts like Singapore, Malaysia and Thailand.

The Cebuano business leader thinks that “ease of doing business” is one area where the Philippines can work on, as bureaucracy in the government from the national down to the local levels could dampen outlook of prospective investors.

Cebu Business Club President Dondi Joseph is on the same page with Maderazo.

For Joseph, while the improvement in the global corruption survey is a good development, the country has yet to see any major improvement in actual FDIs.

“The improvement in our [corruption] ranking has been a major factor to our credit rating upgrades and in the resulting renewed interest in the country as a place to invest in. But that does not mean anything until we get investors to come,” Joseph said.

Meanwhile, Philip Tan, president of Mandaue Chamber of Commerce and Industry, categorically downplayed the survey results.

Tan said there is not much change the results of the survey will make on the business landscape of Cebu, at least in the short term.

“We’re not getting worse, but nothing to be proud of. Unless those that are involved of the Napoles scam are really put to jail,” Tan told The FREEMAN in a text message.

The Cebuano business leaders are also one in saying that the Napoles scam has increased the awareness of civil society and the greater majority on the “evils of corruption.”

“The government, including our previous leaders, was not able to fix this problem. We’re happy that this presidency is brave enough to conduct an impartial investigation and punish whoever is doing wrong irrespective of the political affiliation,” Maderazo talked on the case that has dragged Janet Lim-Napoles and several political figures to the limelight.

The Napoles case, Maderazo reiterated, should not be viewed as a negative thing but a major move to alleviate corruption, eventually enhancing the country’s economic prospects.

“We all know that corruption happened in the past, so rampant and blatant. The decision of the Supreme Court to declare PDAF as unconstitutional is a major step against corruption because this fund is subject to abuse,” said Maderazo.

If the government will successfully convict those who are implicated in the grand scam, Maderazo believes it would reassure businessmen or investors that the rules are equally applied—that consequently, there is no more patronage.

“Any money saved from corruption can be used for the enhancement of social services and infrastructure. That becomes all together creating a better value for a better economy for the country,” he said. (FREEMAN)