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THE good
news, from American business: a recession in the US may
prompt more firms there to resort to outsourcing to save
on costs, and the Philippines is a prime candidate. The
bad news: a recession there would hurt a sector already
reeling as it is from the strong peso—the Philippine
exporters.
The
American Chamber of Commerce (AmCham) believes the
feared US recession—which many American economists and
businessmen say is already a fact—could be an
opportunity for the
Philippines
to get more investments because American firms would
want to outsource more of their operations to save on
costs.
Rob
Sears, AmCham executive director, said the Philippines
must firm up its incentives regime and competitiveness,
however, to get these potential American direct
investments.
Sears
told the BusinessMirror that one of the natural courses
of American companies, should the recession happen, is
to look for suitable and cheaper locations elsewhere to
put up their satellite operations.
The
Philippines, noted throughout the world as a prime
business- outsourcing destination, is a good candidate,
he added. This is, however, premised on the
private-public sector work in improving the country’s
competitiveness as an investment destination, and the
ongoing discussions on the new fiscal-incentives law.
As it is
now, Sears said the Philippines is obviously lagging
behind its neighboring countries in terms of
competitiveness. He added that the proposals they
submitted to improve the country’s standing are still
being implemented by phases, and things are not going as
fast as they hope.
The
foreign business chambers, along with various local
industries, are also wary of the proposals from some
quarters, including the Department of Finance, to remove
fiscal incentives like income tax holidays.
“The
incentives and the competitiveness of the Philippines
are important factors in getting these FDIs,” Sears said
at the sidelines of the Makati Business Club Forum
Tuesday at the Hotel Intercontinental.
Sears
said what will surely be hit, should there be a
recession in the US, is Philippine exports there. “It
will be more difficult because the dollar will continue
to weaken, and with the people having less disposable
income, imports will naturally go down.”
The US
is the Philippines’ perennial top export market. |
