Westmont warns fellow investors in the Philippines
Westmont warns fellow investors in the Philippines
MANILA (AFP): The head of the Westmont Group of Companies yesterday warned fellow Malaysian investors against putting money into "sensitive" Philippine firms after a controversial court ruling that derailed a Malaysian company's investment plans.
"I would personally advise Malaysian businessmen investing in the Philippines to be cautious and selective by choosing non- sensitive types of investments," Joseph Chong Chek Ah, managing director of the Westmont Group, said in a statement.
Chong told Malaysian investors to "avoid those which are of national pride and key economic importance or considered to be of historical significance," the statement said.
His comments echoed a warning by Malaysian Prime Minister Mahathir Mohamad last weekend that Malaysian investors, among the most aggressive in the Philippines, may be forced to scale down their plans after the court ruling.
The Philippines' Supreme Court on Feb. 3 declared void the sale of a 51 percent stake in the historic Manila Hotel to Malaysia's Renong Overseas Corp. Sdn. Bhd., saying that such sites must remain under Filipino control.
The Filipino justices, invoking a "national patrimony" clause in the constitution, ordered the government to sell the five-star hotel to a Filipino consortium led by Filipino-Chinese newspaper publisher Emilio Yap which had lost out to Renong in the September 1995 auction.
Court ruling
President Fidel Ramos, credited for opening up the country's economy, rebuked the court for interfering in the policy-making functions of the government. He ordered government lawyers to contest the court ruling.
The Westmont Group has substantial investments in the Philippines, including US$40 million in Westmont Bank, Inc. and $55 million in a floating power barge.
It plans to increase its stake when Westmont Bank expands its share capital from 1.5 billion pesos to five billion pesos (US$58 million to $193 million dollars) in the next three years.
"We have so far felt welcomed in the Philippines and been comfortable with the cordial business climate and governmental regulations," Chong said.
"However, one should be careful and take cognizance ... of the different local culture and feelings, different legal and parliamentarian systems and of the nationalistic pride of heritage and historical values when investing in a foreign country," he added.
Chong said the Philippines "as a country cannot afford to ignore the continuous role played by foreign investments in economic growth," adding that "to shake foreign investors' confidence ... is to move astern the growing economy."
Philippine Foreign Secretary Domingo Siazon on Tuesday said the Philippines would launch a diplomatic campaign to refurbish its tarnished reputation among overseas investors.
Political scientist Alex Magno told AFP yesterday that the Supreme Court ruling "produced uncertainties which limit opportunities."
Ramos' aides said they would ask the Supreme Court and congress to list government assets considered part of the national patrimony to prevent similar problems in the future.
The government is selling state-run and-controlled assets to shore up its fiscal position and scrap costly subsidies. Next in line are the power generating plants of the National Power Corp.