Maybe my take on the situation differs from the author- as I see it many many foreigners looked at our resources, our beautiful scenic country, and growing economic strength and decided to wait out the restrictive laws on investment. Some liberalization came to be, this is true, but it was not the post-Soviet-style grand opening perhaps some assumed. So now they are disenchanted. Truthfully this is the last thing we need. | Corruption, English decline dampen investors’ interest in RP By Cynthia Balana In its "2007 Investment Climate Statement - The Philippines," the State Department said the The report said high levels of corruption, efforts to reform the judicial system, weak but improving protection of intellectual property rights, slow pace of energy sector privatization, need for further fiscal reforms to boost depressed spending levels for infrastructure and social services, and political uncertainties were dampening investor interest. "Investment Climate Statements," prepared by the US State Department's Bureau of Economic and Business Affairs annually, provide a thorough description of the overseas environments in which The statements cover general characteristics, such as openness to and treatment of foreign investment, details of procedures for licensing, and similar administrative matters. The statements are updated each year as Chapter 7 in the Country Commercial Guides, a series issued by the US Department of Commerce. On the "Foreign business representatives often cite corruption as a serious impediment to investment. Commercial disputes are often difficult to resolve quickly or satisfactorily in the understaffed and complex judicial system," the report said. In addition, the Questions over the general sanctity of contracts in the "Investment disputes are infrequent, but when they occur it can take years for parties to reach settlement. Several disputes have concerned water rights, both for use in manufacturing and in power generation," it also said. Trade infrastructure, including Bureau of Customs operations, inter-island shipping and port facilities outside of It said infrastructure spending remained subject to corrupt practices in allocation, procurement, contracting, and implementation, with a significant portion of the budget wasted. Also, a number of Philippine government actions in recent years have raised questions about the sanctity of contracts and clouded the investment climate, the report said. Recent high-profile cases include the government-initiated review of contracts with power producers, and court decisions voiding allegedly tainted build-operate-transfer agreements and challenging the extent of foreign participation in mining. The report said that government fiscal conditions, helped recently by new revenue legislation, seemed nonetheless to be improving and that the general economic outlook for 2007 was cautiously optimistic. Due to persistent fiscal constraints stemming from the country's high level of debt and persistent tax leakage, the country has consistently under-invested in infrastructure important to both domestic and foreign investors, such as roads and railroads, utilities, health care, and education, the report said. Foreign investors cite relatively high energy costs in the On the brighter side, the report lauded the Philippines for taking these challenges seriously, saying the government is liberalizing the power sector through the sale of assets and is supporting alternative energy sources to reduce dependence on imported fuels. Despite these problems, many foreign investors have maintained long-term commitments to the Philippine market and prospered, the report noted. "The "Philippine observers will watch closely the government's ability to sustain revenue expansion and boost capital expenditures after years of extremely tight budgets," the report said. |
