The European Union, which is composed of 27-member countries, is confident of higher foreign direct investments inflow in the Philippines and robust trade surpassing pre-pandemic levels, but stressed the need to do more to further boost the country’s competitiveness.
During the launch of The Doing Business in the Philippines 2023 Publication, a guidebook for foreign investors in the country by the European Chamber of Commerce of the Philippines (ECCP), EU ambassadors and ECCP officials cited the country’s timely economic reforms – the Foreign Investments Act, Retail Trade Liberalization, Public Service Act, and amendment to the implementing rules and regulations allowing full foreign ownership in renewable energy – in the economic recovery after the pandemic.
EU Ambassador to the Philippines Luc Veron projected that robust bilateral trade will continue this year, surpassing the pre-pandemic level. “Indeed, open trade and investment are crucial to generate the growth and jobs,” Veron added.
In terms of FDI, Veron said that the developments in the Southeast Asia region, particularly the Philippines, are seen with increasing interest in Brussels, the seat of the EU government and European businesses.
Veron noted that EU is “doing very well” in terms of FDI in the Philippines. He noted that investors would look at the positive factors in the Philippines such as being part of a fast-growing region and even growing than its peers, and a very young and growing workforce with a good level of education.
“So, if I'm an investor, I'm going to look at these,” he said adding that most of the EU enterprises and even those in the European Free Trade Associations (EFTA) are composed of small and medium but which constitute very good potential for investments in the Philippines.
But Veron also emphasized saying, “I will not hide the fact that in our view, even more can be done for the competitiveness of the Philippines.”
There are critical issues that are not addressed in the doing business, like the reliability of power supply, and the reliability of connectivity.
In addition, he cited the issue of justice or redress for investors when disputes occur citing the modernization of the delivery of Justice in the country as contained under Chapter 12 of the Philippine Development Plan 2023-2028. He said that delivery of justice has direct link between the economy and the government.
This is important as the Philippines is engaging the world with the President Ferdinand R. Marcos Jr.’s visit to Davos for the World Economic Forum stressing its “It is very important to put the Philippines on the map.”
Thus, the need to address other factors such as environment, climate change, energy and production.
Furthermore, the impact of the pandemic on global supply chain and the economic consequences of the crisis of the Russian war against Ukraine. He further noted that EU has recognized the need to better balance the risks of its supply chains and reduce dependencies on specific providers and markets to create more quality jobs.
He also cited the critical role of an open rule-based trade and investment environment and the role that these rules play in upholding the common economic model and ensuring well being
“And this is why the EU, its trade policy puts a strong emphasis on sustainable development,” he pointed out adding that this is a central pillar in EU’s bilateral relationships.
ECCP President Lars Wittig also said they are expecting “billions worth” of FDIs to come to the Philippines’s way, driving global competitiveness and economic development further.
Alongside the economic reforms, Wittig further stressed that “step-up efforts” such as creating green and resilient infrastructure as well as further prioritizing the wellness and education of the Filipino workforce, be also prioritized.
ECCP Executive Director Florian Gottein said “We are very bullish on the Philippines” as he cited the landmark legislations that opened up the economy further.
Gottein further cited the implementation of the Ease of Doing Business law, which is implemented by the Anti-Red Tape Authority (ARTA). He urged to further strengthen the implementation of the law and enforcement, pointing out that “efforts not always trickle down to the frontliners in different government agencies.”
“So, we still up until now experience or getting feedback from some of our members that you know, some permits take longer than they actually should,” he said. Instead of coming up with other pieces of legislation, he urged the government to focus on the EODB law implementation to basically “roll out the red carpet instead of red taping.”
For his part, Norway Ambassador Christian Halaas Lyster also cited the important legal and policy reforms that have been brought in the Philippines.
“These reforms opened key economic sectors to foreign investment, modernize customs, and could have the potential to improve the ease of doing business,” he said. In particular, Norway welcomed the revision of the IRR on RE that if fully implemented and without restrictions can be beneficial to businesses and investors also from Europe.
He reported positive results of the recently concluded Joint Committee meeting between the Philippines and EFTA (European Free Trade Association) composed of the four small but rich states – Iceland, Liechtenstein, Norway, and Switzerland. The Joint Committee discussed economic issues relating to the bilateral free trade agreement implementation.
In particular, he noted issues on reimbursements of customs duties, recent developments in the Philippines regarding fertilizers, implementation of licensing requirements related to fish and maritime marine products, particularly exports of Norwegian salmon.
He raised that the new rules and regulations should be in accordance with the EFTA agreement.
Also discussed are issues under the trade and sustainability chapter, and the implementation or ratification of international labor convention as well as the Philippines domestic policies on freedom of association, child labor and climate change.
And from the Philippine side, reference was made to find this finalization of the tripartite approach roadmap under the ILO organization. Both parties also discussed sustainable development, which is a top priority of EFTA countries.
“Such an agreement with the joint committee will also help pave the way forward in ensuring that the Philippines as such will become also an even more competitive country in the future,” he said.