Time to Rediscover the Philippines
By Ambassador J. Eduardo Malaya
There’s a Filipino saying that goes, “April’s showers bring May’s flowers.” True enough, things are blooming for the Philippines this month, as the country recently played host to over 70 finance ministers and 2,000 other guests for the 45th annual meeting of the Board of Governors of the Asian Development Bank (ADB), and global network CNN trained its focus on the country through its “Eye On The Philippines” features.
Adding to the upbeat mood are the successive positive outlooks given to the country by global financial institutions. Morgan Stanley recently listed the Philippines as one of the “breakout nations,” and Goldman Sachs proclaimed it among the “Next 11” countries. On May 3, in an article aptly titled “The Philippines astounds the skeptics,” Bloomberg Businessweek cited the great strides that resulted from reforms in governance and gains in infrastructure. For those who can wait out three decades down the road, there is also HSBC’s forecast that the Philippines will be the 16th biggest economy in 2050. But that’s getting too far ahead of our story.
In my and others’ view, a realistic barometer of this renewed confidence is that less and less of young Filipinos are looking for jobs abroad, as there are now available good ones at home, notably in the business-process outsourcing and other sectors. These companies, which handle customer support, technical problems and other tasks for overseas clients, now provide employment to some 640,000 people and took in $11 billion last year, making the BPO voice sector, in particular, the biggest in the world, even ahead of India.
Local and foreign investors have found favor with President Aquino’s no-nonsense good governance thrust, and investments in the country’s key industries are up.
With a level playing field and strong economic fundamentals, indeed, why not?
Consider the following plus factors for the country as a preferred investment destination: (1) the best global business-process outsourcing destination; (2) a top global electronics-assembly hub; (3) the world’s fourth-largest shipbuilder, thanks to Hanjin and other companies; (4) the world’s next mining power; (5) Asia’s trusted logistics support; (6) one of the biggest consumer markets in the world, with close to 100 million population; (7) abundant managerial talents, (8) highly skilled, reliable, English-speaking work force, with wages typically less than a fifth of those in the US, (9) liberalized investment and incentives policies, and (10) for those serious at both work and play, the Philippines is home to Boracay and some of the best beaches and diving adventures in the world.
From nostalgia to action
Many Filipino and Malaysian businessmen look back with nostalgia to the mid-1990s when joint ventures bloomed with encouragement from then-President Fidel V. Ramos and Prime Minister Mahathir Mohamad. Maybank, Berjaya, and numerous other companies came in droves.
Almost unnoticed, though, are the recent upticks—nay, surge—in two-way investments. MTD Corp. rehabilitated the South Luzon Expressway and is now building nine mini-hydroelectric dams in northern Luzon and a complex to house government offices south of the capital. CIMB Bank bought into the Philippine Bank of Commerce with investments reaching some RM1 billion (P196 billion). After profitably operating Resorts World hotel-casino across the Ninoy Aquino International Airport’s Terminal 3, Genting is investing in a second casino complex by the famed Manila Bay to be completed in 2016, in the new “Entertainment City” which aims to rival Macau.
Economic partnership being by nature two-way, Philippine telecom market leader PLDT Global teamed up with Axiata Corp. to cater to the telecom needs of businessmen, tourists and workers traveling back and forth. To top it all, Petron Corp. bought controlling shares in the retail-services business of Esso Malaysia Bhd., with investments worth at least $610 million.
There is also considerable trade going on. In 2011 Malaysia was the Philippines’s ninth-largest trading partner, with total trade amounting to $3.7 billion. Philippine exports to Malaysia in 2011 were valued at $1 billion, while imports from Malaysia during the same year amounted to $2.6 billion.
Meanwhile, we have been closely following developments in the Malaysian economy, and are encouraged by its achievements, particularly in encouraging Malaysian businessmen to consider investments and business activities in Asean in anticipation of the establishment of an Asean Economic Community in three years.
These developments can serve as timely prompts to our respective business sectors to expand their horizons, work together, and take advantage of what is on the other side of the fence.
Toward this end, the Asian Institute of Management Alumni Association of Malaysia (Kelab AIM), Asian Strategy and Leadership Institute and the Philippine Embassy in Kuala Lumpur are conducting the Philippines-Malaysia Investment Partnership Forum on May 29.
This forum will be highlighted by the presence of MITI Minister Dato Sri Mustapa bin Mohamad, venerable business guru Washington Sycip and Vice President Jejomar C. Binay, who is visiting Kuala Lumpur for the event.
This event aims to bring together business leaders from the Philippines and Malaysia to exchange ideas on how to further spur economic and investment partnership, particularly in the priority sectors of tourism infrastructure, mass housing, energy/electricity, agro-business, Islamic finance, halal food, and the numerous investments opportunities in the Autonomous Region in Muslim Mindanao.
The Philippines and Malaysia are neighbors and one of the first five original partners in Asean. Relations between the two countries are deep and long-standing and their peoples have interacted since time immemorial. There are so much shared interests, including the quest for stability and economic development of Mindanao and the sustained growth of the BIMP-Eaga region.
It is hoped that the investment forum would provide the spark for a renaissance in bilateral partnership.
It is time to rediscover the Philippines, the preferred business partner next door.