The Philippines has been deemed the “worst country to do business” in Asia by US-based business news network CNBC.
“Foreign businesses are wary of the Philippine’s unstable legal system, violence, and bureaucracy,” said CNBC.
According to Sergio Ortiz-Luis, president of the Philippine Exporters Confederation, “investors, particularly exporters, were getting tired of waiting for the government to address their perennial problems. The constitutional restrictions on foreign ownership of land, he said, were another thing that the government should “seriously” consider addressing. Other issues that needed resolution were high power rates and the lack of streamlined fiscal incentives.”
“These are things that we should have done 30 years ago. These problems persist and remain unsolved,” he said.
Ortiz-Luis added that “the state-owned Power Sector Assets and Liabilities Management Corp.’s pronouncement that the discounted power rates for economic zone locators would no longer be extended was a huge turnoff for exporters. This has actually led some exporters to shut down their operations here and transfer to China, Vietnam or Indonesia.”
As citizens, how can we improve our rankings and get off the “world’s worst” lists. Much of it depends on government action and changing existing laws. Still, we can give our unsolicited advice.
Create incentives, change 60-40 law
In a twitter discussion, @franky suggested “Ditch the 60-40 laws… I propose 20 years staged plan in which law’s gradually taken down. Eliminating immediately will only see an invasion of multinationals buying at cheap prices. ”
@FrancisAcero clarifies that “You need a Constitutional amendment to let 60-40 comedown take effect.” . Like Ortiz-Luis , @FrancisAcero believes “There are two 60-40s that should come down: prohibited list and property ownership. ”
A question is posed by @franky: “If you were foreigner, would you want to start a company here if you can’t own your ‘own’ company? ”
I added that we need to focus on domestic enterprises. @FrancisAcero says “Both have to happen: they help each other, allow locals more exposure to best global practices.”
@franky adds that it is important the Philippines stay “away from unstable revenue: Tourism, OFW. Need to create local and export economy. ” @jefftagle suggests to” put in more incentives for pinoys, without discouraging foreign investments.” and “tax breaks and less red tape and bureaucracy would be a start. paperwork is a b*tch.”
Incentives suggested by @franky:
1. Many attending university. Create $$$ incentives for students who start local business.
2. Tax breaks should be offered if company reaches xx employees in first x years.
3. Additional incentives, tax bonuses, for growing companies. Important to stimulate further investment, rather than new riches.
@franky believes there is massive business opportunities for the Philippines: Solar power (for hot water and ‘dress’ all condos in translucent solar panels). Another is “PVC recycling. Also to be used to create schools & hospitals in provinces”.
The “solar power should become requirement for all new condos. Offset cost on price of condo, $$$ bonus given to developers”
These are just some of the business opportunities that are being discussed in Twitter. The government need to identify business opportunities that will stimulate domestic enterprises and foreign investments at the same time.
The National Competitive Council of the Philippines (NCCP) is set to meet on November 18 to address the findings of the WB report on which the CNBC ranking was based on. Virgilio Fulgencio, executive director for public sector is “studying and dissecting the issue para ma-isolate natin ang dapat gawin.”