Touting “improving infrastructure,” a level playing field and business processes tagged “globally competitive,” the Aquino administration is confident of luring some of the excess resources of Philippine companies earlier reported on a buying binge abroad.
Malacañang on Tuesday cited some of the key factors that bolster such confidence, on the heels of reports that some of the most successful Philippine businesses have been busy acquiring assets abroad, using excess cash built up thanks to a robust domestic economy.
The Palace was asked whether it was looking to collar some of such extra cash from Philippine businesses, even as the latest Bangko Sentral ng Pilipinas (BSP) report showed continuing sluggishness in terms of foreign direct investment (FDI) net inflows.
While July net FDI inflows showed a slight 1.6-percent increase, the BSP reported on Monday that the 7-month net inflows declined 35.2 percent, from $3.8 billion to $2.5 billion. For the first semester of 2015, the decline in net FDI inflows was even sharper, at 40 percent, from $3.4 billion in January to June 2014, to only $2.0 billion in the first half of 2015.
Asked whether the intensified push for public-private partnerships (PPPs) provide successful Philippine businesses enough motivation to prioritize investing at home, Communications Secretary Herminio B. Coloma Jr. replied: “The government has fostered a healthy environment for investments by improving physical infrastructure and ensuring a level playing field anchored upon good governance.”
In terms of the PPPs, Coloma noted that the Aquino administration has also “created a wholesome climate through transparent and efficient processes that have been cited as globally competitive.”
The big Philippine businesses’ overseas forays in recent months were deemed logical, given their extra stash from the robust growth at home, as well as the bargain prices in some distressed economies abroad and record-low interest rates.
However, analysts had also noted that the overseas buying binge signals the big Filipino companies’ frustration with “enduring problems at home,” such as red tape, regulatory risks and slow action on proposals from the private sector.
The Executive had in recent days stressed that these concerns of the Philippine companies—many of which were echoed in the 10-point list embodied in last week’s Joint Foreign Chambers statement—are being continually and determinedly addressed.