EDITORIAL - Decreasing business optimism

Despite efforts undertaken by President Aquino in the early days of his administration to bring back investor confidence, it’s quite sad that unfriendly business climate has returned to the Philippines.

In its recent Business Expectation Survey, the Bangko Sentral ng Pilipinas said the business sector is still less buoyant as the business optimism index dropped for the second straight quarter.

   The BSP survey showed that from 47.5 percent in the first quarter this year, the business optimism index fell to 31.8 percent in the second quarter. It was in the last quarter of 2010 that the index hit a record high of 50.6 percent on account of strong move by the administration to stir business trust.

   According to the country’s central monetary authority, the drop in the business optimism index was due to the slow business procedure, higher operating costs, and delayed disbursements for government projects.  

   Still the BSP was quick to respond that it is premature to conclude and there is no basis that the business community is now getting impatient with the Aquino administration.

   Yes it may be too early to judge the administration’s business policies. But the fact remains that the decreasing business confidence will surely be another big blow to the country in its effort to compete with its neighbors in the race to entice more foreign investments.

   For years already, the Philippines has been lagging behind in the global business competitiveness. With more sound economic policies, Thailand and Indonesia, the once less attractive economies in Asia, have become the favorite destinations for foreign investments in Southeast Asia.

   Even Vietnam is now giving the Philippines a run for its money. The communist state has already received more foreign investments since it opened up its economy to the world a few years ago.  

There’s really an urgent need for the Aquino administration to address problems in business policy implementation. Only by wiping away obstacles that are giving headaches to the business community can the Philippines gain momentum in the race for global competitiveness.