IF the Arangkada Philippines blue-print of the Joint Foreign Chambers (JFC)—which set medium-term targets for investments and job generation when it was launched back in 2010—is to be made as basis, the Aquino administration was a resounding failure.
Consider these: Arangkada’s foreign direct investment (FDI) target was an average of $7.5 billion a year from 2011 to 2015, while President Aquino was only able to deliver an average FDI haul of $3.9 billion.
John D. Forbes, senior adviser of the American Chamber of Commerce of the Philippines (AmCham), knows the reason behind the failure.
“We targeted an average of $7.5 billion a year for a decade [to 2020] and have a total of about $20 billion for 2011-2015. But everything the JFC recommended to reach the target was not done,” Forbes said in a text message.
‘Seven big winners’
The Arangkada recommendations—had they been implemented—would have set the enabling environment for the robust growth of the JFC’s so-called seven big winners, sectors that the Philippines have strong potentials.
These are the Agribusiness; Information Technology-Business Process Management; Creative Industries; Infrastructure; Manufacturing and Logistics; Mining; Tourism, Medical Travel and Retirement. Today, the AmCham and other members of the JFC are still pinning their hopes on these sectors; and they’ve even up the ante in terms of the FDI goal for the next few years, with the change in administration set to take place by June.
New administration, new goal, same recommendations
The JFC on Tuesday said attracting $10 billion to $12 billion annually by 2018 is a good target if the next administration would move faster in putting in place key policy reforms.
Henry J. Schumacher, external vice president of the European Chamber of Commerce of the Philippines, said to remind policy-makers of the JFC’s recommendations, they have set another Arangkada Forum on March 1, or more than a month before the May national elections.
“The money is in the region. We have no doubt the Philippines is capable of doubling the amount of FDI, as seen in the last two years,” Forbes said. According to the United Nations Conference on Trade and Development, the average FDI gained during the Aquino administration from 2011 to 2015 was $3.9 billion, doubling the annual average of $1.5 billion during the Arroyo administration.
From January to October 2015, the Philippines netted a total FDI of $4.98 billion, a drop of almost 5 percent from the same period in 2014, when full-year FDI reached a record-high $6 billion.
The Arangkada Philippines initiative of the JFC also targeted 10 million jobs for the period 2010-2020. “With more reforms, $10 billion to $12 billion a year could be expected, which could possibly reach the original $75-billion total for a decade. And for the decade after 2020, it could be even higher. Hopefully, the next president would prioritize higher investment targets,” Forbes added.
A steady growth, which could go as fast as 10 percent, is on the horizon if a reform-oriented leader would step in, the JFC said.
Julian Payne, president of the Canadian Chamber of Commerce in the Philippines, said three fundamental issues must be addressed, and these are the usual suspects: easing of the FDI restrictions, openness to globally significant trade deals such as the Trans-Pacific Partnership; and bureaucratic red tape.
The JFC also noted that honoring the sanctity of contracts, a review of the government procurement law, and notable tax reforms should be high on the agenda of the next Chief Executive. The present administration has failed to act on the chief proposal of the JFC, which is to amend certain economic provisions of the Constitution. This was stalled due mainly to the hard-line stance of President Aquino against Charter change.
The Fifth Philippines Arangkada Forum will serve as the venue for foreign business groups to air their “priority issues” for the assessment and consideration of the presidential candidates.
President Aquino and the presidential candidates have been invited to the forum. The event will be held at the Marriott Grand Ballroom with the theme, “A Bolder and More Inclusive Decade.”