Why foreign investors shun the Philippines?

Philippine former president Fidel V. Ramos (extreme right) agrees with the author's (center) observation on the inequitable business partnership between foreign investors and their Filipino counterparts as provided by the Philippine Constitution

BY MORTZ ORTIGOZA

In a recent conversation with former President Fidel V. Ramos at the Lucap Wharf (after he scuba dived at the Hundred Islands) in Alaminos City, he agreed with my observation that our country needs to liberalize the 60-40 percent, 70-30 percent, and even 100 percent business equities in the 1987 Constitution  in favor of Filipinos.

“I agree with it, and we should also change the system of government from presidential to parliamentary,” he told me after I cited how incompetent leaders like Greece’s George A. Papandreou and Italy’s Silvio Berlusconi were replaced by technocrats to avoid their countries spiraling into the economic morass.

But look what I found here!

It is the latest survey conducted by business TV channel CNBC that the Philippines is among the worst in Southeast Asia to conduct business in and the 4th worst in the world  according to top business executives who were interviewed.

CNBC, on its poll titled “The World’s 10 Worst Countries for Business” published on November 3, 2011, said the Philippines attains only 2.5 percent of the $76.5 billion of foreign direct investment (FDI) that flowed to the 10 member-states of the Association of South East Asian (ASEAN) in 2010.

The prestigious business TV channel wondered why this happened despite having a massive untapped mineral water, a long geographical South East and North Asia neighbors, and a large English speaking population, the country still failed to stir the economy to significant growth.

The culprits, according to CNBC, are the country’s unpredictable legal system, violence, and bureaucracy.

“Its ease of doing business ranking from the World Bank fell a further two spots this year from 2010. The country also ranks among the lowest when it comes to starting business and resolving insolvency, with the latter taking more than five and a half year, compared with an average one year and seven months in OECD countries,“ its says.

***

That’s why BIR Regional Director Arnel Gubala was all praises to the South Koreans when he told me how that country (where he attended career schooling) has dusted- off Japan, Hong Kong, and the United States in terms of development in infrastructure landscapes.

He said that the Korean government invites member countries of East Asia for them to learn for free about taxation, economics, ecology, etc

He lamented that when he asked foreign participants in a mammoth five- star- hotel- liked government seminar and facilities where the Thais, the Vietnamese, and the Malays are, he was told that they were not around because they concluded their schooling there as they were in a higher category compared to our country.

“I could only shake my head when I learned that Philippine delegates were with delegates from Cambodia, Burma, Sri Lanka, and Laos,” he told me.

Talagang Laos na tayo, sir!

Those Thais and Malaysian used to learn from us in the 1950s and 1960s but have long dusted us now in the number games of Foreign Direct Investors.

“Don’t you know that the Korean hosts told us they copied the taxation of the Philippines in 1970s under (former president Ferdinand) Marcos and look where are they now? They are now part of the top ten richest countries in the world!” Guballa zealously explained to me. (You can send comment at totomortz@yahoo.com).