Bad journalism bashes Philippine business

An article about the Philippines hit the Internet last week with the completely misleading headline, “Survey: Philippines Viewed by Japanese as One of the Riskiest Places for Business.” The copyright is by All Headline News from AHN Media Corp. and is dated March 27. It is at http://www.allheadlinenews.com/articles/7010455308.

The article, which incorrectly puts the Philippines in a negative light, talks about a survey, released last week by Jetro, or the Japanese External Trade Organization.

My opinion is that either the author never properly read or perhaps misinterpreted the Jetro survey. I sincerely hope that this was not a deliberate attempt to discredit the Philippines.

The purpose of the survey is to profile more than 700 Japanese companies on their business plans with the world. Five hundred of those companies have existing operations overseas, including 15 who have some sort of operation set up in the Philippines.

The second paragraph reads, “The survey of international operations of Japanese firms, 66.4 percent of those polled, said they have plans to expand offshore operations, but the Philippines was their least choice among 18 countries.”

This is false.

The implication is that there was a question that said, “Where do you want to do business?” and the Philippines came in number 18. In fact, there was no such question.

There were several questions asked about company expansion. In summary, it went like this: if you are expanding your sales operation, or research and development (R&D), or distribution, or regional headquarters or production overseas in the next three years, where are you going to locate?

Of course, the Philippines was near the bottom. China was the overwhelming favorite for sales expansion with its billion-plus consumers, as, too, with the US. China was favored as a regional HQ since China is Japan’s largest trading partner. China, Europe and the US are the places to go for R&D facilities. The top five for production were China, Thailand, Vietnam, India and the US.

No Japanese firm plans on setting up a primary R&D facility in the Philippines over the next three years. But they also have no similar plan to set up in Mexico, Brazil or Eastern Europe.

Only 1 percent of the surveyed companies intend to set up production plants in the Philippines. But this is a higher percentage than those that intend to build up these facilities in Hong Kong, Singapore, Canada, Mexico or Russia.

The article falsely implies that the Philippines is unfavorable a place to do business in without putting the survey in any factual context. This is dishonest journalism at the most, and sloppy “news” at the least.

The language itself is inflammatory and fraudulent. “The poll placed Manila the 15th-best place to conduct primary research and development in and worst place to conduct new product development.”

The survey never talked about “best” or “worst,” nor did the question even speak of “favorable” or “unfavorable.” It simply asked Japanese businesses “where firms are planning to expand through new investment or building up existing bases.” Yes, most are going to China. Yes, few are coming to the Philippines.

The survey results, when the companies were asked to “rate” each nation according to certain factors, was most revealing.

The article says that the Philippines is “one of the riskiest places for Business.”

The survey asked about “risks or issues in doing business” and separated “risk” into eight categories: high foreign-exchange (forex) risk, inadequate infrastructure, lack of clustering or development of related industries, underdeveloped legal system, intellectual-property rights, rising labor costs, tax-related issues and labor issues.

In six of those areas, guess which country was considered the riskiest? China. Vietnam topped as the riskiest in business development and in inadequate infrastructure.

The Philippines never showed up as risky for labor costs or tax problems. In the other categories, the Philippines was the fifth riskiest out of five for forex, third for infrastructure, fifth for legal, third for business development, fourth for property rights and fifth for labor problems.

Based on all the eight risk factors, China is the riskiest with 31 points, followed by India (24), Vietnam (23), Indonesia (16) and then the Philippines (11) and Thailand (8).

Perhaps to attempt to show journalistic balance, the article concludes, “But there was some positive news for the Philippines as the firms gave plus points to the Philippines in the areas of little language barrier, second; fifth in full set of preferential measures and incentives; fifth in low business costs; and fifth in easy to access local information and services.”

It might have been nice if the article had compared this 2007 survey with the 2006 report. In one year, the Philippines lost its risk factor of “political/social instability” and improved in all the other “risk” factors.

The headline for AHN’s article should have read, “Survey: China Viewed by Japanese as the Riskiest Place for Business and They Still Want to Invest.” Or perhaps, “Survey: Japanese Think Philippines is Getting Better for Business.” 

E-mail comments to mangun@email.com.

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