By Jerry Maglunog
Accolades about the Philippines are being peddled by government drumbeaters to convince the public that the economy is growing and investors are investing their money in the country.
Some of the most overused praises are “one of the fastest growing economies in Asia,” “the country with the most number of increased rating from respected rating agencies,” “the next investment destination” and “the world is coming to the Philippines.”
Many critics, however, are wondering why such excitement is being generated through these propaganda.
“If the national government really wants economic progress, it should lower the cost of doing business here,” said Dr. Benjamin Diokno, chairman of the Pamatansan ng Lungsod Maynila Board of Regents.
A survey by The Market Monitor revealed that there is so much red tape in many local government units (LGUs) and prospective investors are invariably turned off.
According to Diokno, the cost of doing business in the Philippines is too big to be ignored. Diokno’s definition of the cost of doing business includes the length of the waiting and the risks involved before their investment starts operating.
One investor who planned to put up a multibillion-peso hydro power plant in San Mariano, Isabela, waited for almost two years for the firm’s permits, totaling about 160. The other requirements are still gathering dust in some LGU officials’ desk. “It’s a sad thing that the tuwid na daan is still unknown in many places,” the president of the conglomerate who refused not to be named, Diokno said.
The sad fate of this investor is just a tragic of the investment climate in the Philippines. No single government agency has the data on how many multinational firms are on the waiting list to do business here.
A look at the data revealed that the $16-billion foreign direct investments (FDI) of the Philippines in 2013 were the third lowest after Laos and Cambodia.
Diokno, budget secretary during the term of President Joseph Estrada, said if the national government cannot do anything to reduce red tape in the country, it might want to instruct the departments of Trade and Industry and the Interior and Local Government make a list of places where the investment climate is is less exasperating.
If there is a list of cities and towns that require fewer permits and documents, then the investors can have a guide on where to put their money. The suggestion is good if an investment is a plain warehouse, office or satellite headquarter of any multinational. But a mining venture would be a different story.
The Mines and Geosciences Bureau, an attached agency of the Department of Environment and Natural Resources, said mining investment is more complicated, as majority of sites are located in places where indigenous persons (IPs) live.
MGB Executive Director Leo Jasareno said relocating IPs entails a lot of money. Lumads and Manobos are the most relocated IPs because areas they inhabit are almost always rich in copper, ore and gold.
Some of the country’s biggest mining firms are totally or partly sitting in IP places such as Philex, Taganito, Sagittarius and Nickel Asia.
Although Jasareno didn’t say how many documents are needed to be secured before a mining investment can proceed, it can be concluded that it is a lot longer and costlier.
“What I know is it is more complicated than ordinary investment,” the official said. He added that threat posed by rebel groups is another headache for investors. He cited the experience of one mining firm in Agusan del Norte where New People’s Army rebels burned its trucks after the firm refused to pay revolutionary tax.
“So-called environmental groups opposed to mining are also a big problerm. They always say mining destroys the environment and they refuse to recognize the economic benefits that result when the mine starts operating,” the MGB official said.
“The worse thing is many mayors demand money from investors, especially now that election is coming,” said another source who asked not to be named.
So the next time the government issues a statement that the economy is growing, it should be the FDIs that must grow, not the dollar reserves or the stock-market index, Diokno added.