This snippet from Business World, Ghosts of the Past Haunt Philippines:
INVESTORS GATHERING at a Manila hotel this week to hear the Philippines’ president pitch for $17 billion of infrastructure projects can look out of the window directly at a symbol of the difficulties of doing business in the Philippines.
The country needs private funds to upgrade its dilapidated infrastructure as it aims to reverse decades of decline and lift its growth rate upwards to 7-8% so that it can catch up with some of its Southeast Asian neighbors.
President Benigno S. C. Aquino III is not planning a hard sell aimed at signing deals during the conference. Instead, he intends to project a more investor friendly image to try to overcome the country’s lowly rankings in global business surveys and begin the process of lifting widespread investor skepticism.
But just out of the window from the hotel where the conference is being held, delegates can see an unfinished terminal at the capital’s international airport that has come to embody the challenges of doing business in the Philippines.
It was supposed to open in 2002 but instead became entangled in a protracted legal dispute triggered when a new government came to power and had the contract reviewed. It was eventually declared void by the Supreme Court.
“We are looking at how to safeguard the interest of foreign investors,” said Henry Schumacher, executive vice-president of the European Chamber of Commerce of the Philippines.
“We still have Terminal 3 which is an unresolved big issue. It is a bit funny that the conference is going to be opposite Terminal 3, so foreign investors will say, ‘hey man, what is this?’.”
Around 300 foreign and local investors have signed up for the conference to be held on Thursday and Friday, organizers say.
Investors have generally welcomed comments by the new president since he came to power in June that he will protect them and offer a level playing field.
Still, investors want to see real changes given the country’s history of contract problems, corruption, flip-flopping policies and a sometimes inconsistent legal environment.
“Investors must have that trust that once you enter into contractual arrangements, these arrangements must be adhered to,” said Neeraj Jain, the Asian Development Bank’s country director for the Philippines.
Investors are right you know? That’s one of the biggest problems with investing in the Philippines. There is no assurance that their grievance could be heard, if it came to that. The flip-flopping policies, just look at the whole SLEX debacle as the latest in a series of policy flip flopping.
How can people invest in Public-Private partnerships when after completing the project, no money could be made to recoup the investment?
What assurances can be had in that?
Photo credit: Malacañang Photo Bureau