RP more attractive to foreign investments, UK report says

The Philippines has become more attractive to foreign investors after it improved its ranking in a UK report issued recently. The country – Southeast Asia’s fastest growing economy two years ago – ranked ninth among emerging markets for global investors this year from 23rd place a year ago, new research released by the UK Trade and Investment said. The UK is the top contributor to the Philippines’ foreign direct investments, placing $298.17 million last year by acquiring long-term stakes in local companies, putting up factories, or purchasing equipment. Vietnam emerged as the top choice among foreign investors, said the report which asked investors which among emerging economies they plan to invest in over the next five years. Coming in second is the United Arab Emirates, followed by Mexico , South Africa, Malaysia, Indonesia, Singapore, Turkey, the Philippines, and Saudi Arabia. Fifty percent of respondents identified political risk as the biggest government-related challenge to doing business in emerging markets. The UK Embassy in Manila cited local and foreign chambers’ support for “continued reforms despite significant progress." Both chambers of commerce submitted a list of ten pieces of proposed legislation that they believe will improve the Philippines investment climate, the embassy said. The report pointed out that the “basic conditions in the emerging economies are varied and not universal," UK Secretary of State Lord Mandelson said while addressing the Economist Intelligence Unit's Emerging Markets Summit on Thursday. “China and India have continued to grow rapidly, although at less than the trend rate of the last decade. Other parts of the emerging world are also performing well relative to the rich world, but well below recent trend," Mandelson said. Of the more than 500 companies polled for the report, many remain cautious about quick recovery but they nevertheless are optimistic about the long term potential of emerging economies, he added. Seventy-seven percent of the companies polled expect the global economy to improve in 2010 to 2011, the report said. Sixty percent revealed that they plan to earn more than 20 percent of total revenues from emerging markets in a five year period. Last year, only 31 percent of companies surveyed expressed that opinion. The global meltdown is a “wake-up call" for companies to consider new opportunities offered by emerging markets such as the Philippines, British Ambassador Stephen Lillie said. “We are encouraging UK business to look to the Philippines and find new business in this exciting new market," he said. During the Emerging Markets Summit, President Gloria Macapagal-Arroyo cited the Philippines’ economic growth of 1.5 percent in the second quarter. The President also thanked Britain for “its generous assistance" to the ongoing peace efforts in Mindanao, including sharing its experience in establishing peace in Northern Ireland. - GMANews.TV