JFC says reforms to boost foreign direct investments

Foreign direct investments (FDI) could grow substantially in a decade if the government implements reforms prescribed by the business community, the Joint Foreign Chambers (JFC) said on Monday. The umbrella group set a target of $75 billion in FDI by 2020 — a more than sixfold increase from the 1999 to 2009 total — after recommending ways to improve competitiveness in seven key industries. Proposals from 300 stakeholders and summarized in a forum on Monday ranged from drafting industry road maps, lifting investment barriers and improving the ease of doing business for "big winners" such as agro-industry, business process outsourcing, creative industries, manufacturing and logistics, infrastructure, mining and tourism. "We’re setting a target of $75 billion in FDI over 10 years. That’s what it’s all about. If [the reforms are implemented], there is no reason this can’t be achieved," John Casey, president of the Australia-New Zealand Chamber of Commerce of the Philippines, said at the forum. FDI flows from 1999 to 2009 amounted to just $11.99 billion, central bank data showed. Foreign direct investments are thought to be more useful to a country than investments in the equity of its companies since stock investments are potentially "hot money" that can leave at the first sign of trouble. FDIs are generally useful whether things go well or badly since these are placed in so-called brick and mortar enterprises that generate jobs for thousands of Filipinos. The investment target is arbitrary, Casey clarified, but is "quite achievable" considering that forecasts peg annual FDI flows to the region at $200 billion per year. The JFC goal also includes generating 10 million jobs from these investments, based on employment projections of the BPO and mining sectors, among others. To achieve this, the next administration must cut business costs and ensure a stable environment, Canadian Chamber of Commerce of the Philippines President Julian H. Payne said. Agribusiness can be competitive, for instance, if the government ramps up research spending, allows firms to own larger tracts of land and bolsters export development projects. For BPOs and creative industries, the government should pass laws setting up a Department of Information and Communication Technology and rationalize work holidays; invest in education for the workforce; and allow foreigners to practice in creative industry professions to encourage technology transfer. Recommendations were also laid down for transport, power and water infrastructure. The government, they said, should reform policies to encourage private sector participation. Stakeholders also sought master plans and lower production costs to benefit the manufacturing and logistics industries and the travel sector. For mining, recommendations included cutting red tape at all levels. "We will push this agenda to the new government, seek dialog and try to help as [much as] we can," European Chamber of Commerce of the Philippines Vice-President Michael Kurt Raeuber said, adding that a road map would be presented to the new President in July or August. Board of Investments Executive Director Efren V. Leano said on the sidelines of the event the $75-billion investment goal was doable considering the Philippines was already luring an average of $2 billion yearly. Trade Senior Undersecretary Thomas G. Aquino noted that the business group would have to "sit down with the next administration" to get the job done. Aside from the Australian-New Zealand, Canadian and European chambers, the JFC includes the American Chamber of Commerce of the Philippines, Japanese Chamber of Commerce & Industry of the Philippines, Korean Chamber of Commerce of the Philippines and the Philippine Association of Multinational Companies Regional Headquarters, Inc.