RP  INVESTMENT CLIMATE  'DETERIORATING', SAYS U.S. REPORT

MANILA
, March 4, 2005
 (STAR) A United States report revealed Friday that the Philippines' investment climate has 'deteriorated' as compared to its neighbors in Southeast Asia.

In a report taken from the website of the US embassy to the Philippines, it said, "The comparative advantages the Philippines once enjoyed vis--vis its neighbors in attracting foreign investment have deteriorated."

As one example, it said, "English language proficiency, while improving in other Southeast Asian nations, is declining in the Philippines."

"The increasing US commercial familiarity with other Southeast Asian economies- most notably China and Vietnam - has eliminated some of the unique commercial ties that the Philippines once enjoyed with the United States," it said.

It also noted that some of the Philippines' problems like: High levels of corruption; failure to reform the judicial system; ineffective protection of intellectual property rights; the slow pace of energy sector reform, price liberalization, and privatization; delays in passing key economic and fiscal reform legislation; and political uncertainties surrounding the May 2004 election "combined to constrain the government's ability to attract foreign direct investments over the past year."

Furthermore, the report cited a self-proclaimed fiscal crisis in August 2004 also gave rise to concerns over the country's economic stability.

Due to persistent fiscal constraints, it said, the Philippine government has consistently failed to invest in the infrastructure most important to both domestic and foreign investors, such as roads, communications, healthcare and education.

"The situation has also led to government inability to deal with congestion and pollution in the country's major cities, most notably Manila," it noted.

Trade infrastructure urgently needs attention, especially Bureau of Customs operations and the nation's maritime highway system, including roll-on-roll-off port facilities outside of Manila, it likewise stated.


Reported by: Sol Jose Vanzi

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