EU investment in RP can go up but changes needed

EU investment in RP can go up but changes needed

MANILA (AFP): European Union (EU) investment in the Philippines is ready to shoot up but measures are needed to improve the business environment, business leaders said in presentation papers released Saturday.

The Philippines must continue to liberalize trade, cut bureaucracy, become more competitive and promote more awareness between the Philippines and Europe, the businessmen and officials said in the papers which came out of a conference earlier last week.

"The trade and investment relations are good but there is definitely room for improvement," Henry Schumacher, executive vice-president of the European Chamber of Commerce of the Philippines said in his presentation.

Cielito Habito, former economic planning secretary, said EU investment in the Philippines rose from 1.6 percent of total foreign investment in 1990 to 17.4 percent in 1998.

However the EU still only has one-fifth of total foreign investments in the Philippines, Habito said in his paper.

The Philippines has weathered the Asian currency crisis better than its neighbors and can boast of "superior human resources" in such areas as information technology, health care, education and training, Habito said.

Schumacher added the Philippines' democratic government, a free press, liberalizing trade and investment policies made the country competitive as an investment site compared to other Asian countries.

But he warned a recent failed attempt to impose controls on petrochemical imports had raised fears protectionism was rising again.

Infrastructure, particularly in transportation, was also reaching its limits, he said.

Yet potential investors in infrastructure projects were blocked by concerns over chronic right-of-way problems and court orders blocking contractual obligations, he added.

A bill to open the retail industry to foreign investment has been slow in making progress while a tax reform program that was suppose to "level the playing field ... burdened business more."

Schumacher added that "awareness of business opportunities in the Philippines has to be raised in Europe" which still had largely overlooked the country.

Yves Gazzo, ambassador of the European Commission, said public governance and flexibility in the labor market also needed to be improved to attract European investment.

Gazzo said future cooperation between the EU and the Philippines should focus on providing support to economic policy reforms that seek to address those issues.

Trade and Industry Undersecretary Melito Salazar said that many of these issues were being addressed.