The Market Monitor Minding the Nation's Business
Riza Lozada
Trade chambers led by the American Chamber of Commerce in the Philippines have sought a long term roadmap that will enable the Philippines to move up the global business and competitiveness ladder particularly with the advent of ASEAN integration and forthcoming foreign trade agreements (FTAs) such as the Trans Pacific Partnership (TPP).
The TPP is being spearheaded by the United States and it targets free trade among members of the Asia Pacific Economic Cooperation (Apec) forum.
In calling for a long-term roadmap to achieve competitiveness amid the integration of ASEAN economies by 2015, the Joint Foreign Chambers (JFC) which sponsored the forum said that the ASEAN will jumpstart the creation of a 600 -million base consumer economy where long term prospects for investments, employment and equitable development are prioritized. With the Philippines’ growth trajectory complementing its desire to be a key and major player in the ASEAN integration, it needs to enable a competitive environment for industries to thrive, participate in global value chains, and create quality jobs, the JFC said.
This was the concensus during the recently held Fourth Arangkada Assessment Forum in which business groups gave progress reports on key policy issues and the status of the business environment during the Aquino administration.
The event was highlighted by a common call of Joint Foreign Chambers (JFC) members for a long term strategy and continuity of reforms that are necessary in giving direction towards inclusive growth.
Foreign investors also clamored for more sustainable reforms as they believed that these would be key in achieving the elusive goal of inclusive growth.
Government state figures released last week showed that poverty level in the country was at a high 25.8 percent despite the average six percent economic growth during the term of Aquino.
Various heads of trade groups noted that while there has been a very big improvement in competitiveness that contributed to the increase the gross domestic product (GDP) and inflows of foreign direct investments as well as the improvement in the credit ratings of the country, they cited “binding constraints that have been deterring the path towards achieving inclusive growth.”
Identified as critical areas that would have to be addressed in instituting reforms for inclusive growth were creating a sound investment climate through regulatory and policy coherence; enabling the middle class through equitable participation and larger share in economic activities; promoting trade and investment liberalization and creating a level playing field for investors; providing opportunities for gainful employment especially to the young labour force; and, supporting integrity, transparency, judicial reforms, anti-corruption and peace initiatives.
The joint foreign chambers represent the largest groups of foreign businesses composed of the American, Australian-New Zealand, Canadian, European, Japanese and Korean Chambers in the Philippines as well as the Philippine Association of Multinational Companies Regional/Operating Headquarters, Inc., representing over 3,000 companies, with $200 billion worth of trade and $30 billion investments to the Philippines according to the Arangkada press statement.
The JFC noted that reforms in governance contributed to good economic performance. The group made recommendation for the public sector to continue improving its policies in creating a better environment for jobs to flourish with a better educated, healthier, and secure workforce enjoying modern infrastructure as well as putting in place supportive rather than burdensome regulatory regimes.
The business leaders have agreed that the public sector continues to be the enabler for job growth while the private sector remains the engine. Both the private and public sectors would have to work in parallel for inclusive growth and job creation, the JFC stated.
American Chamber president Rhicke Jennings acknowledged many significant reforms achieved under the Aquino Administration.
“Looking back at 2014, there was good news for future inclusive growth. GDP at 6.1 percent was one of the highest in the region; domestic and foreign investment is rising; International credit and competitiveness ratings improved; BPO, construction, manufacturing and tourism were strong growth drivers; 2.5 million Filipinos escaped extreme poverty; and unemployment fell to 6%,the lowest in a decade,” the Amcham president said.
The Arangkada Assessment of 462 Recommendations showed an overall improvement in the percentage of recommendations that are active/moving to 74.22% in the latest 2014 assessment from 51.44% in the first assessment in 2011.
Twenty sectors/subsectors were rated as more active/moving:1 growth, competiveness, agribusiness, business process outsourcing, creative industries, tourism, infrastructure policy, airports, roads and rail, water, environment and natural disasters, governance, judicial, labor, local government, macroeconomic policy, security, education, health and population, poverty.
Nine sectors/subsectors were rated as less active/moving: 2 logistics, manufacturing, mining, power, seaports, telecommunications, business costs, foreign equity and professionals, and legislation.