05 May 1997 00:00 [Source: ACN]
Marita Jimenez of the Philippine Board of Investment points to the country's advantages
AS ONE of the individuals tasked with putting the Philippines on the international business map, Marita Jimenez, executive director of the Board of Investment's (BoI) Investment Promotions Group has an enviable job these days. Political stability and a strong economic performance have boosted investor confidence and placed the country up among the leaders in the regional race for international capital.
Overall, investment in the Philippines grew by almost 20% in 1995 and of that, some 80% came from the private sector. Equally important is the fact that a huge 40% chunk of these funds are being directed into industrial estate development and thus are creating the building blocks for continued expansion.
'There have been a lot of reforms in the past four years,' comments Jimenez. 'We are now one of the most globally oriented countries in this part of the world.'
Jimenez attributes the transformation to the Philippines' strategic location combined with a healthy cocktail of liberalisation, deregulation and privatization.
But according to her, there is another comparative advantage which is 'strictly Filipino'. She says: 'We are very proud of our productive labour. It is hardworking and English-speaking. With its high literacy rates, the Philippine workforce also has a reputation for being easy to train and quick to learn new skills. Our levels of productivity mean that even if wage rates rise, costs per unit of labour still remain low. We may not always be cheap but we are cost effective.'
Investor confidence in the Philippines has been boosted not only by political stability under the Ramos government but by greater social harmony within the country itself. Jimenez points out that a peace pact agreement was signed last year, bringing stability to the southern island of Mindanao which has previously experienced civil strife. The government's policy of decentralisation and local autonomy is paying off. Growth is no longer concentrated around Manila but is accelerating in the regional markets too. Mindanao is a good example of this, with 6% growth registered for the central districts during 1995 and 6.3% in the south.
Better job opportunities have helped boost wages and spending power. Employment in the industrial sector recorded a 5% increase in 1995 and per capita income has now risen to US$1095/year, well ahead of the government's target of US$1000 by 1998.
'The next stage for the government is to tie up procedural requirements,' says Jimenez. 'We have to come up with facilities and assistance for investors so that those who register with the BoI can get their papers quickly.'
The Philippines has a large array of growth areas, growth corridors and special development zones all aimed at attracting investment. 'We have prepared locations for businesses where they are already supported by infrastructure,' says Jimenez. 'To further improve this, we concentrated on dynamic areas that only need a flick of the finger.'
Jimenez points out that some zones have been designed to attract specific types of industry. The Export Processing Zone at Baguio, for example, is best for the electronics industry. The Cavite and Cebu Export Processing Zones play host to small- and medium-sized manufacturing companies while Bataan has been designed with heavy industry in mind. New industrial development is discouraged in the congested metro Manila area although the modernisation of existing projects is allowed.
Jimenez highlights incentives such as income-tax holidays and tax-free imports of capital equipment as some of the benefits available to BoI-registered investors. 'In terms of type the incentives are fixed, but in terms of extent it depends on the company, with so-called "pioneer industries" receiving maximum benefits. Petrochemicals is a pioneer and one of the strategic sectors we would like to see develop,' she adds.
There is a lot of well-earned goodwill towards the Philippines these days and Jimenez is in no doubt the country should make the most of it.
'The Far East Economic Review figured the Philippines as the number one investment area in this part of the world... we are looking at ways we can benefit,' she says.
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