By Recto Mercene
Conclusion
CANADIAN Chamber of Commerce in the Philippines President Julian Payne said the other factor contributing to the country’s growth is the misfortune of others.
“We have to admit that if we look at the world today, the European economy has not been particularly robust, the US economy went through a weak patch, the Japanese economy was sluggish, the Chinese economy was facing rising costs and less competitiveness, so therefore, money and investments did not have too many options on where to go,” Payne said.
He said the Philippines lucked out when the investments started flowing to Southeast Asia.
However, this is where Payne’s caveat is worth considering. He said within Southeast Asia, the Vietnamese and Cambodian economies are doing quite well, while the Thai economy went through a bit of a rough patch, while the Indonesians are doing fine.
“So in the sense that the Philippines, in my view, not only benefited from its internal improvements and the diversification of its economy but also benefited from others misfortunes,” Payne said.
The cautionary tale Payne wants to tell is that, although we have a robust economy at the moment, fueled by overseas Filipino workers’ remittances, increasing number of business process-outsourcing companies, and a healthy growth in foreign direct investments, some of it would falter at any sign of instability.
He said the upcoming election is one of them. “Whenever you change some administration or government through election in any country, there is always an element of uncertainty,” Payne said.
“Some business executives are wondering what is going to happen after the Aquino administration is done, and this is not to say anything bad or good about any of the candidates,” Payne said.
He added: “When you are anticipating a change in the government, people do not know what is going to happen. The uncertainty causes a little bit of anxiety among businessmen.”
The second issue is other countries’ misfortunes. Payne says if the US economy continues to improve, if the Japanese economy were to take off, if the Chinese economy reversed and becomes more competitive, if Thailand suddenly becomes much more stable, businesses might potentially look at other countries aside from the Philippines.
“So in a sense, foreign investments are replaceable. It can go to any place. It will go where the conditions are best, the prospects are best, where there is a best return on money. They look at this environment and look at others and they go elsewhere. It does not go by sentiment,” Payne said.
One area that could throw a lifesaver to these many shaky enterprises, fueled by the unknown factors, is mining.
Payne believes that unemployment, which the Philippine Statistics Authority estimates at 2.70 million as of 2014, could be dramatically reduced if the mining industry is opened up to foreign investments.
“If you have a healthy mining industry, with growing investments in mining, you will have a huge increase in jobs,” Payne said.
He estimated that there would be a million Filipinos employed, directly and indirectly by the industry.
He said Canadian mining companies are some of the best and most socially responsible mining companies in the world.
“We have learned a lot from our experiences, and some of our experiences in the past were quite painful,” Payne said.
Despite that, there are three active Canadian mining companies in the country, and Payne finds the present regulatory framework for mining not very hospitable and competitive.
“Of course, mining has a huge potential, but virtually no growth at all. In fact, I believe that the investments have dwindled and the revenues have dwindled,” Payne said.
Asked to quantify mining’s potentials, Payne said there are three levels where one has to look to find the answer: “What mines are actually producing? What proven reserves are there? And what resources we speculate we have?”
Payne said his understanding is that the Philippines is the fifth most mineralized country in the world, based on speculations on resources.
However, he said, if compared with countries with proven reserves, the Philippines is in the top 10, not in gold or copper, but in silver.
“Without questions, there is huge potential for mining because the country lies along the ring of fire, like Indonesia, Chile and the west coast of Canada,” he said.
But Payne added that it will still need to be verified. “We do not know. The proof is in the pudding. The proof is in proved reserves.”
1 comment
CORRECT—