|
WHILE
Southeast Asian exports—as a region—to the European
Union (EU) continue to mount, the exception is the
Philippines, whose own export to the EU has been in
steady decline for the last five years.
This
situation was blamed by the EU envoy to Manila Alistair
MacDonald, who heads the Delegation of the European
Commission as the EU embassy is called, on the lack of
economic stability and slow improvement in the
investment climate.
He said
the average rate of decline of exports is 6.1 percent
every year. Thus, exports of €7.1 billion (est. $9.5
billion] in 2003 were down to €5.6 billion (est. $7.6
billion) last year.
The
resulting slack in Philippine exports had been taken up
by neighbor countries such as surging
Vietnam,
where pledges of direct investments grew to $20 billion
last year. This enabled Vietnam to increase exports to
the EU to the present level of 12.7 percent of all
exports from the Southeast Asian region. It was followed
by Thailand with 8.7 percent, Cambodia, 7.9 percent;
Indonesia, 4.9 percent; and Malaysia, 3.2 percent.
The EU
envoy noted that the poor performance of the Philippines
may be structural, and the biggest decline was in the
electronics sector.
Besides
economic and political reforms to attract investments,
he said the Philippines should stop looking at the EU
with a “tower vision,” i.e. Eiffel tower, the tower of
London, the leaning tower of Pisa. In other words, as
simply a tourist destination.
MacDonald said, “Rather, the
Philippines
should take full account of the trade and investment
partnerships which the EU-27 [members] has to
offer—diverse but dynamic, with a market of 500 million
consumers ready to buy quality products and services at
quality prices.”
MacDonald, who was speaking in a recent forum of the
European Chamber of Commerce in the Philippines, added
that the Philippines should take advantage of the
business opportunities in their bloc, which has now
become “the largest single market in the world” with a
combined gross domestic product (GDP) of €10.9 trillion
[est. $11.3 trillion] and a per capita GDP of €22,450
[est. $30,530].
The EU
envoy said the core issues that deter foreign
investments in the Philippines include the lack of
physical infrastructure as well as human infrastructure
that includes improvements in health and education.
He said
the measures to improve business climate should include
good governance, transparency, rule of law, and
preventing red tape, stopping smuggling and removing
corruption.
“The
actions to maintain and strengthen fiscal and monetary
stability [include] setting a calm macroeconomic
framework, keeping inflation under control, and
strengthening government revenues and spending them
wisely,” he added.
He also
lamented that while its Southeast Asian neighbors are
keen on negotiating the proposed comprehensive
free-trade agreement between the EU and the Association
of Southeast Asian Nations, the Philippines so far
“seems hesitant about discussing this.”
The FTA
between the two regional blocs is anchored on an
individual Partnership Cooperation Agreement to be
negotiated with Asean members singly. The negotiations
for the FTA formally started in May last year and are
targeted to be completed within two years. |
