EDITORIAL – Attracting investments

Never mind the seemingly over-optimistic figure. The point is that foreign businessmen believe there could be more foreign direct investments in this country if we improve the business climate. Top businessmen belonging to the Foreign Chambers of Commerce took time out from their busy schedules the other day to attend a workshop and then draw up recommendations on how the Philippines can attract $3 billion in additional foreign direct investments or FDI a year. One investor estimated that the figure could go as high as $8.5 billion a year, generating up to a million new jobs annually — if the nation does its homework.

The figures are not misleading; other countries in Asia have managed to attract those levels of FDI over the past decades when the Philippines began its slide from the top to the bottom of the regional heap. Today, despite modest annual economic growth and a stable currency, the country continues to languish near the bottom in terms of national competitiveness and FDI levels. Finding few attractive employment opportunities in the country, a tenth of the population has left for better-paying jobs overseas, and more are leaving every day, aggravating problems in education and public health care. The remittances of those workers contribute to economic growth, but the exodus cannot continue indefinitely.

Investments that can generate jobs with decent pay will keep Filipinos in their own country. Local entrepreneurs cannot create enough of those jobs at this time, and the country must do more to attract foreign investments. The Foreign Chambers, meeting with Philippine economic officials at the workshop, drew up recommendations to bring more FDI into several promising sectors, among them mining, energy, health and retirement tourism, information technology and electronics manufacturing.

The potential for greater FDI can be realized if the nation can deal with problems that have long held back investment growth: corruption, red tape, political instability, high power costs, poor infrastructure, unpredictable business policies, the failure to guarantee the rule of law and integrity of business contracts. It is no coincidence that the best economic performers in Asia dealt with most of those problems years ago. We cannot even open one airport terminal without the project getting bogged down in all those problems. Unless those concerns are addressed to a certain degree, foreign investors will find other countries nearby to put in their money.