[ONE-YEAR-OLD PHOTO -On behalf of Together-Ensemble Foundation and the European Chamber of Commerce in the Philippines, Hubert d’Aboville (center) received the Apolinario Mabini Memorial Award for Excellence in Humanitarianism, for each organization and for himself, from F oreign Affairs Secretary Alberto Romulo (left). He was likewise inducted as Commissioner of the U.N. White Helmets by Philippine White Helmets Commandant and Minister of the Permanent Mission to the U.N. in Geneva, Jesus Domingo (right).
MANILA, Philippines - The perceived instability of business contracts in the Philippines remains a major issue that is holding back foreign investments, although the Aquino administration is trying to assure investors that this is now a thing of the past.
Hubert d’Aboville, president of the European Chamber of Commerce of the Philippines, said investors cannot help but be reminded of past incidences of contracts being rescinded by the government, especially when a new administration takes office.
D’Aboville noted that in investment missions that he participated in, businessmen often mentioned that they were concerned with the policy changes that new administrations undertake, which affect existing businesses.
“For somebody who wants to invest for a long term, we cannot just look at five years. We need to sell a bigger picture than the five years of the administration. We have to be at ease with the government that after five years, the project will be completed,” d’Aboville said.
In an interview with The Associated Press on Friday, President Aquino said he has canceled a Belgian-funded lake-dredging project, and ordered a restudy of a Chinese-financed rail line and renegotiation of a French-funded port work.
The President said although his country badly needed improvements, the contracts were overpriced and technically deficient.
He did not accuse anyone involved in the three projects of corruption but said dredging, in particular, “is one of the most notorious practices for those who do corrupt practices...so I have a tendency to be allergic to such projects.”
Mr. Aquino’s year-old administration is fighting graft while wooing foreign investors to partner with his administration to boost the economy and fulfill his promise of easing poverty.
“We thank the foreign governments that have been assisting us,” he said. “We think it is incumbent upon us to be responsible with their kindness in ensuring that these projects are worthwhile.”
The President said he wanted to make sure that such projects would also allow the country to repay its loans to foreign creditors in the long run.
The best way to address this problem, according to Trade Undersecretary and Board of Investments managing head Cristino L. Panlilio, is to make sure contracts are done transparently and with no legal problems.
“We just have to make sure that the contract is done right, and that a new policy does not discriminate or favor anyone. Naturally, when there are problems with the contract and it is reviewed by the new administration, it will be changed,” Panlilio told the BusinessMirror.
Justice Assistant Secretary Geronimo Sy said one approach to promote stability is for the government to have longer programs than the usual five-year Medium-Term Philippine Development Plans (MTPDP).
Studying all the development plans since the 1960s, Sy said they found out that there was none that spanned at least one generation.
Instead of having MTPDPs that last up to the end of the term of the existing administration, Sy said the country should have a development program that will last for 30 years.
“We need a development program that is at least 30 years broken down to five cycles of the different administrations. Medium term is too short for big businesses,” he said.
D’Aboville said foreign investors should also be given the assurance that they are not just signing a contract with the current government but with “Philippines Inc.”
“We want the secretaries and the President to commit to this,” he said.
He said investors will go to a place where they
are assured that their investments will be solid for
the next 30 years.