Despite headwinds experienced in the past years, the European Chamber of Commerce of the Philippines (ECCP) has expressed optimism that the Philippines will gain more foreign direct investments (FDIs) in 2024, citing the country's current gross domestic product (GDP) performance, and continuous economic reforms for greater competitiveness and ease of doing business (EODB).
“Despite the macroeconomic world turmoil, we remain mostly positive with regards to the performance of the Philippine economy for 2024. We have good tailwinds and good elements. There is a headwind in regards to inflation, still some work to be done there,” said ECCP President Paulo Duarte during the “Doing Business in the Philippines” press launch on Wednesday, Jan. 31.
He noted that the impact of the growth in the middle class and the young population, as well as pushing for digitalization to reduce deficiencies to attract investments contribute to their optimism.
Duarte expressed the European business community's intent to progress the streamlining efforts of the government in bureaucracy, particularly in enabling business-friendly systems, easier processes for business registration and licensing, ease of paying taxes and enforcing contracts.
The chamber is also welcoming positive signs of resumed talks between the European Union and the Philippines concerning a free trade agreement (FTA), as well as the growth in trade volumes between Norway, Switzerland, Liechtenstein, and Iceland through the European FTA (EFTA) signed in 2016 and enforced in 2018.
Norwegian Ambassador to the Philippines Christian Halaas Lyster said that they have seen Philippine imports to the EFTA countries surpass 350 million euros in 2022, and EFTA exports to the Philippines was at 433 million euros in the same year, which is the highest export value recorded via the EFTA.
Lyster said they will continue to monitor the enforcement of the agreement and conduct analysis of preference utilization to fully optimize the FTA's potential, and increase trade activity.
However, challenges remain such as issues concerning red tape and corruption, which the ambassador noted was not good for businesses. He commented on the lower ranking of the Philippines in the Global Transparency Index, stating “it would be good for businesses in the Philippines to climb higher in the index.”
He echoed the ECCP's call for enhancing digitalization processes which can be a benefit to fighting corruption.
In terms of the pressing debates spurring in the national government to amend the constitution or enact “charter change,” Duarte stressed the Chamber's support for initiatives to enhance investments to the country regardless of constitutional reform.
“There are reforms to improve like removing the foreign equity [law], but I'm not sure if this needs to be done at a constitutional level. More on laws and regulations that don't necessarily need to go through the constitution,” said the Chamber president.
“We are defending the foreign companies that come to the Philippines, and have opportunities to grow in this fantastic market. You have a good map of reforms that have been introduced through this administration. Everything that helps the Philippines to attract more foreign investments is welcome,” he added.
Ambassador Luc Veron from the Delegation of the EU to the Philippines also chimed in stating that “most of the things we are doing, the constitution has no impact.”
“A lot can be done without touching the constitution. As to what the Philippines will decide, we will look at the result of this political debate, then we can see whether it's good for business or not,” said Veron.
The ECCP has close to 800 overall members, mixed with European and Filipino companies, establishing a strong network for bilateral engagements between business in the Philippines and Europe.
The ECCP and Divina Law presented their new edition of the “Doing Business in the Philippines” publication that serves as a manual guidebook for potential and existing investors on the current business-related laws and procedures in force in the country.