MANILA – Foreign business chambers remain bullish about the Philippines despite the twin shocks of martial law in Mindanao and last week’s Resorts World Manila attack.
Officials said the country’s economic prospects were still a major draw, but added that investors were also looking at the planned removal of fiscal incentives and continued limits on foreign ownership.
Talking about the twin shocks in Mindanao and in Metro Manila, Vanessa Hans, managing director of CCI-France Philippines, said: “It’s something that is worrying people, but it’s not just for the Philippines; those are things that have been happening unfortunately worldwide. France has lso been one of the countries affected by attacks.”
She added, “so right now, in terms of confidence of investors, we still have a lot of companies investing in the Philippines. The indicators are still strong, we have a lot of interesting projects ongoing.”
For Joona Selin, executive director of the Nordic Chamber of Commerce of the Philippines, “well, that’s something that of course we have to be very aware of and have our contingencies planned; and be aware of these incidents which unfortunately seem to happen all over the world right now.”
Officials of various foreign chambers said investors were still focused on the country’s economic prospects.
Investors come to this country for the long term, noted Chris Nelson, executive chairman of the British Chamber of Commerce Philippines. “There will always be issues going on, not just here but of course very very tragically in London, very recently.”
He added that “for the British Chamber, we got over a thousand companies expressing interest to do business here in over three years.”
Still, the German Chamber of Commerce admitted to fielding more than the usual number of inquiries following the June 2 Resorts World Manila attack by a lone gunman who set fire to gaming tables at the casino area, leaving 37 people dead, mostly from smoke inhalation after they were trapped.
Peter Kompalla, executive director of the German-Philippine Chamber of commerce and Industry, said “this was even more challenging last week when you had this attack in Resorts World,” adding that “never before have we received so many inquiries of all channels from Germany.”
Overall, the foreign chambers said investors were more concerned over ownership laws that were restricting investments in the Philippines.
Kompalla’s take on this: “We know that there are many companies looking at the Philippine market, and we know the foreign ownership restrictions are holding them back. Because what you have to see these companies, they have 50-180 employees but they have a long tradition; they are family-owned, they built everything by themselves so if they make a commitment, they want to be sure that everything is safe.”
The 1987 Constitution generally caps foreign ownership of Philippine companies to 40 percent, but certain sectors such as mass media remain off limits.
Foreigners are also not allowed to own land and investors have often complained against these restrictions.
One ridiculous result of this restriction is painted by Lorens Ziller, executive director of the Italian Chamber of Commerce in the Philippines: “When an Italian would like to open up an Italian restaurant and pizzeria in the Philippines, he’s hes not allowed to do so. Probably he would have to take a Filipino, take him to Italy and send him back and say you open an Italian restaurant. Of course that’s a little bit absurd because an Italian restaurant should be run by an Italian. And the chef should also be an Italian.”
Cautious on tax reforms
The foreign chambers also said investors were closely watching the government’s proposed tax reforms, which include the removal of incentives for ecozone locators and outsourcing firms.
Selin of the Nordic Chamber of Commerce said, “What I would like to raise from the IT-BPO sector, which is the major employer and industry, is the multiplier effect it has. There is certainly a current concern in terms of the removal of the VAT exemption from PEZA locators, which is part of the bill. The industry is concerned about that, and that might lead to some growth projections for that industry to look a bit dimmer in the future.”
Chamber officials said they supported the Duterte administration’s bid to raise revenues for much-needed infrastructure.
At the same time, however, they urged the government to carefully weigh the impact on industries that bring in foreign direct investments.