RISKS TO DOING BUSINESS IN RP RISING - ADB
MANILA, September 15, 2005 (STAR) (AFP) - The risks to doing business in the Philippines are rising, leading to a sharp drop in foreign direct investment (FDI) in the Southeast Asian country in recent years, according to an Asian Development Bank study.
Rising fiscal deficits, the increasing influence of vested interests in the courts and in lawmaking, and the government's weakness "in creating and enforcing freely competitive and/or regulated markets" act as deterrents to prospective investors, said the report, obtained by AFP Thursday.
"While private enterprises dominate the economy, effective competition does not exist in many sectors, it added.
The Manila-based ADB said private investment flows to the Philippines slowed after the mid-1997 Asian crisis "and have yet to recover".
Gross domestic investment fell to 18.1 percent of gross national product (GNP) in 2002 from 23.8 percent of GNP in 1998. FDI flows meanwhile plunged to 100 million dollars in 2003 from a high of 2.1 billion dollars in 1999.
President Gloria Arroyo's government reported earlier this week that FDI flows had jumped 191 percent from a year earlier to 495 million dollars in the six months to June but the total was a pittance compared to amounts going to many of Manila's developing Asian neighbors.
"For foreign investors, the perceived risks of doing business in the Philippines are rising, encouraging them to seek alternative investment destinations" such as China, South Korea and Thailand, the ADB report said.
"Disputes concerning private contracts in power, water and airport sectors have highlighted the weakness of the legal and regulatory framework, the limited recourse available to resolve disputes, and the high level of political intervention in the commercial sector."
"High costs of power and labor" are also key factors, it said.
The government has little room to improve physical infrastructure due to chronically low revenue collection, the rising burden of losses by state-owned corporations, and high foreign debt service costs, it added.
The report recognized steps taken by Arroyo to improve governance, which it said must continue.
"In the Philippines, vested interests and systemic corruption will continue to make this process very challenging but significant progress can be achieved with sustained political commitment."
RP overseas remittances up 22.1 percent 09/15 12:54:31 PM
MANILA (AFP) - Overseas workers sent 5.8 billion dollars in cash back to their families in the Philippines in the seven months to July, up 22.1 percent from a year earlier, the central bank said Thursday.
July transfers through the formal banking system alone grew 25.7 percent from a year earlier to 885 million dollars, it said.
"The continued rise in remittances resulted from the increase in the number of Filipino workers and the sustained efforts by commercial banks to provide banking assistance" to them, it said in a statement.
The United States, Saudi Arabia, Italy, Japan, Britain, Hong Kong, Singapore and the United Arab Emirates were the top sources of remittances.
The labor department expects a million Filipinos to seek work abroad this year, with annual remittances to rise 10 percent from the previous year to 9.4 billion dollars.
Labor department data showed that 599,196 Filipinos went to work abroad in the seven months to July, up 5.2 percent from a year earlier, the central bank said.
Customs misses goal by P7B By Ding Cervantes The Philippine Star 09/15/2005
CLARK FIELD, Pampanga – Customs Commissioner Alexander Arevalo said yesterday that his agency was P7-billion short of its target collections as of last August, but expressed confidence that it would even be able to surpass its P151-billion target for this year.
Arevalo said he has initiated measures to curb "technical smuggling" of petroleum products from which the bureau derives about 15 to 20 percent of its revenues. He has also ordered the adoption of a six-day work week for units dealing with importers.
"January was the only month this year when we were able to even go beyond our target of P100 million. The August deficit was the highest since last February," Arevalo said in an interview with newsmen here during the inauguration of the new Bureau of Customs (BOC) building donated here by SM Prime Holdings Inc.
He attributed low revenue collections primarily to the low peso-dollar exchange rate last July. "There were business decisions that we cannot influence," he said.
Still, Arevalo expressed confidence that he would be able to surpass this year’s target of P151 billion.
Arevalo said shipping associations have committed to support the BOC proposal for tankers delivering oil products to the country to declare their shipment 48 hours before arrival. "This will prevent them from retouching their import information," he said.
He added that the BOC has signed a memorandum of agreement with petroleum importers for them to use special "chemical markers" in fuel products. "Then we will go to gas stations to monitor whether what they’re selling have these chemical markers. If there is none, then they’re selling smuggled fuel," he said.
Arevalo also cited plans to extend working days up to Saturday not only in the BOC but also in banks in various ports and special economic zones nationwide, among port operators, customs brokers, the Philippine Chamber of Commerce and Industry which encodes customs transactions, transporters, and even tricycle drivers who provide transport to port personnel during Saturdays.
Six-day work scheme, he said, would enable more time for business transactions and thus increase customs revenues.
"Going to work on Saturday requires culture change because we have to change the way banks do business. We have signed an agreement with bankers for their banks (at ports) to be opened from 11 a.m. to 7 p.m. every Saturday. Then we have to arrange it with the Clark Development Corp., Subic Freeport and other economic zones because they are not into six-day work scheme," he said.
Clark Development Corp. (CDC) president and chief executive officer Antonio Ng said the personnel of one department dealing with importation concerns of investors at Clark have started working on Saturdays.
Arevalo said the P151-billion target this year is about 22-percent higher than last year’s. He noted that while his agency fell short by P7 billion last August, collections for that month were still higher by 21.5 percent than in August last year.
Chief News Editor: Sol Jose Vanzi
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