EU business downgrades PH as secondary market

Published January 23, 2020, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

European investors have relegated the Philippines as a secondary market only given challenges in the country.

This was impressed upon by Thomas Wiersing, charge d’ affaires of the European Union Delegation to the Philippines, during the press launch of the “Doing Business Handbook in the Philippines 2020”.
Wiersing explained that the Philippines can be considered a secondary market in relation to the EU firms’ preference to pour in their capital in other Asean countries.

He cited issues of trust on government contracts that must be respected based on legal principles.
Wiersing pointed out that based on the partial data, the Philippine FDIs in 2019 showed a 32.8 percent decline to $5.8 billion only.

In terms of approved foreign investments, 6 percent of total came from the EU.

But he said “This is a massive decline from previous year’s average of 20 percent share contributed by the EU in approved investment figures.”

“This is a worrying downward trend that could further confirm the Philippines’ modest attrativeness to foreign capital,” he said.

In terms of trade with EU, the Philippines has not been doing good either.

The ambassador pointed out that the Philippine utilization of the EU GSP Plus is estimated at around 25 percent only of total Philippine exports to the EU or approximately 2 billion euros in benefits from the trade preference particularly in agri products.

“It is therefore hoped that the GSP Plus utilization rate of the Philippines further increase in 2020,” he said.

The biennial GSP Plus report of the EU Commission is expected to be published soon. It will cover 2018-2019 progress of the Philippines in the implementation of 27 international conventions, relating to human rights, labor rights, environment and good governance.

Nabil Francis, president of the European Chamber of Commerce of the Philippines (ECCP), also supported the Ambassador’s statement noting the 30 percent decline in the country’s foreign direct investments.

He wondered why foreign investors who left China shy away from the Philippines and go instead to Vietnam when the Philippines have more advantages.
He said there is a need for to improve the business reputation of the Philippines.