Editorials:

Illustration by Jimbo Albano

Housecleaning first

The car you drive probably sports a Japanese brand or was made under license from a Japanese company—so are your TV, radio, laptop and even the noodles you have for a quick lunch. True, Korean and Chinese consumer goods have made significant inroads in our market in recent years. Still, “Made in Japan ” is emblazoned on many of the products we Filipinos continue to use.

Japan Inc. maintains a pervasive presence in this country. However, the truth is that the Japanese regard the Philippines as a minor market. According to a 2007 survey conducted by the Japan External Trade Organization (Jetro), our country ranked last among 18 destinations of Japanese investments in this part of the world.

That information was volunteered by former Vice President Teofisto Guingona Jr. and other opponents of the Japan-Philippines Economic Partnership Agreement (Jpepa), which is awaiting Senate approval.

On the other hand, proponents of the Jpepa, notably President Arroyo, claim that without the agreement, the Philippines could lose as much as the equivalent of P365 billion in foreign direct investments (FDIs) from Japan. Without the Jpepa, they add, those FDIs would likely be channeled to other Southeast Asian countries.

“The Jpepa is worth it,” this paper quoted the President as saying the other day. “We cannot afford not to ratify it because with everyone else but us onboard, the Japanese will bring their business to them. So we hope the Senate would ratify the Jpepa when Congress convenes next week.”

Mrs. Arroyo said that after Singapore, the Philippines was the first country with whom Japan broached an economic partnership with. Since then, however, Malaysia, Thailand, Indonesia and Brunei have passed their own versions of the Jpepa.

Question: Would the imprimatur on the Jpepa by 16 of our senators put our country on the same footing as our neighbors in the race for Japanese FDIs?

The President, her Cabinet and some senators claimed to believe as much—but that did not seem to be what the results of the 2007 Jetro survey indicated.

The same survey—which presumably had Japanese investors and business executives as respondents—showed that our country was among those investment destinations that contained “many risks of doing business.”

The Jetro survey showed the Philippines is not a priority destination for Japanese FDIs for the next three years or so due to “inadequate infrastructure, an underdeveloped legal system and problems with legal operation.”

The country’s lack of all-weather roads, container ports and air terminals as well as modern cargo-handling and storage facilities has, for decades, zapped the confidence of even Filipino investors to sink money into the economy. What more of foreigners?

Meanwhile, the Jetro survey respondents’ observations about our “underdeveloped legal system and problems with legal operation” were a polite, typically Japanese rendering of the global perception of widespread corruption and inconsistency of regulations in the Philippines.

During a recent economic forum at the Clark Free Port, a similar observation was made by a European diplomat who reported on his compatriots’ dismay over the absence of “the sanctity of contracts” in the Philippines.

That ratifying the Jpepa could suddenly turn things around for the Philippines as a prime location for Japanese FDIs is a dubious proposition. What keep businessmen—whether Japanese, Filipino or some other nationality—from investing in this country are internal problems we Filipinos need to first address and solve. Only after we have done so can we expect the Philippines to become an attractive investment destination.

In true nationalist fashion, Guingona and company liken the Jpepa to the post-World War II parity amendment which allowed the Americans to dominate the Philippine economy. We would not go that far, however. The world has turned several times over since September 18, 1946, when the Congress of a prostrate Philippines felt compelled to change the Constitution and let in the Yankee carpetbaggers.

The Philippines—like any decent homeowner—needs to do major housecleaning before it can be taken seriously when it spreads out the welcome mat.

Simply ratifying the Jpepa, we’re afraid, won’t do the trick.

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