While European businessmen in the Philippines have turned more optimistic and see a faster recovery of the country’s economy, they also note the importance of passing the remaining economic reforms in unlocking billions of dollars foreign direct investments (FDIs).
Lars Wittig, president of the European Chamber of Commerce of the Philippines (ECCP) in a press briefing yesterday said the group sees between 6.5 and 7.5 percent economic expansion for the year but this depends on the passage of the final bills pending at the Senate, the Public Service Act (PSA) and Foreign Investment Act.
“We have a very realistic expectation for that to be approved and finalized by this week,” Wittig said, referring to the PSA.
He said ECCP has been getting inquiries from European businessmen for possible investments as well as trade that could lead to manufacturing, in anticipation of the passage these bills.
Wittig cited OECD 2020 data which showed the Philippine economy remains to be among the most restrictive.
“This is very important because it is holding us back, we need to be less restrictive. This really can change by passing the PSA,” he said adding, the law can bring billions of dollars in investments in shipping, airlines and telecommunication.
Wittig said Asean is Europe’s top investment destination and that European businessmen should look at the Philippines as a “touchdown” for the region.
“Very often, the Philippines is actually not even being considered.
“That is a very big loss for the Philippines,” Wittig said.
FDIs to the Philippines in 2020 at the height of the pandemic hit $6.5 billion , of which $324 million were from Europe, twice as much as the investments from the US, according to Wittig.
Wittig said while the Philippines enjoys the Generalized System of Preferences Plus which grants zero tariffs on a number of exports to Europe, the European Union (EU) continues to be interested in forging a free trade agreement (FTA) with the country.
“We are not there yet,” he said, adding an FTA with all of Asean is being considered instead.
“I’m just afraid that’s a more complicated way to go because there are 10 Asean countries and you can always find one… that will refrain from accepting and ratifying a free trade agreement with all of us,” Wittig said, referring Myanmar.
“I personally feel that that will delay the free trade agreement with Asean and therefore, we need to go back and see how we can further (and FTA) specifically for the Philippines,” Wittig said.
Socio-economic planning Secretary Karl Chua said in a separate briefing they are waiting for the enrolled bill on the Foreign Investments Act to be transmitted to the Office of the President, “and this will be a Republic Act very soon.”
The PSA, meanwhile, was approved by the senate last December.
“We are told that the bicameral starts today, and we hope congress can conclude the bicameral and ratify it before it adjourns this week,” Chua said. – Irma Isip and Angela Celis
