Economists say that infra, not incentives, will lure investors

Setting up infrastructure and getting rid of red tape — and not adding more incentives — will do a better job at enticing investors to the Philippines, according to economists from the Ateneo Center for Economic Research and Development (ACERD).

Incentives can certainly help, but factors such as lack of transportation, bad roads, and difficulties in doing business could just as easily discourage investors from putting up businesses in Philippine areas that are in need of more jobs.

In a recent forum, ACERD Director Alvin P. Ang said that the country needs to “catch up” in infrastructure. He added that based on data from the World Economic Forum (WEF), there are three main areas of concern for investors in the Philippines: corruption, inadequate supply of infrastructure, and inefficient government bureaucracy.

“We still need a lot of catching up. As you know, we are the lowest among ASEAN,” said Ang, who also pointed out data from investment agencies showing negative growth in the country.

He also pointed out the recently passed ARTA law [Anti-Red Tape Act] “which should simplify business registrations in the country.”

Meanwhile, former Socioeconomic Planning Secretary Cielito F. Habito said that data also showed the Philippines as laggard in terms of foreign direct investments (FDI) among the ASEAN-5.

According to Bangko Sentral ng Pilipinas (BSP)’s data from 2017, the country only booked $10.1 billion worth of investments. In terms of exports, the Philippines only earned $69 billion last year, the lowest among the ASEAN-5.

“Thirteen years ago, Vietnam was still lagging behind us. And we were only $45 billion away from Indonesia. Look at where we are now, we are now $100 billion lower than Indonesia, Vietnam has since overtaken both the Philippines and Indonesia,” Habito said.

via Business Mirror / Cai Ordinario