Vipul Bhagat, IFC country manager for the Philippines and Thailand, said this at the launch yesterday of the World Investments Report 2005 by the United Nations Conference on Trade and Development.
In the World Investments Report, the Philippines ranked 113 among 155 countries in the choice of investment location by transnational corporations.
That perception of risk and related macro economic situation are something that the government should try to address to.
In the areas of electronics, Bhagat noted that electronics can be used to grow progressively upward in the value chain.
He pointed out that Intel established its first R & D in the country 20 years ago.
"It would have been very easy to use that to move up in the value chain but it was not happening on a big scale," Bhagat said.
At present, electronics comprised 70 percent of the country’s total exports but most of which are semiconductors items.
In the area of mining, Bhagat noted the enthusiasm brought about by the attendance of 500 foreign mining executives at the recently concluded Asia Pacific Mining Conference.
"While it is still an area of contention, some misplaced some genuine, but look at it as an opportunity to increase flows of investments once they are in," he added.
In the services sector, Bhagat said the Philippines has captured a large slice of business process operations and call centers.
"There is a tremendous opportunity for growth in this sector because the Philippines has an educated and English speaking workforce. The government should capitalize on this," he added.
Services already accounts for 50 percent of the country’s gross domestic product.
Bhagat noted it as a cause of concern why the Philippines ranking has been declining over the years in the survey.
In fact, it is the only country rated lower in the region except for Laos and Cambodia but Vietnam is even in a much better position and Thailand is at number 20.
Indonesia is at 115 but there are indications of business preferences for this country and the perception is the country is going in the right direction.
"If it is not a cause for alarm then it is a cause for concern," Bhagat said.
Trade and Industry Undersecretary Elmer C. Hernandez, who is also Board of Investments managing head, also noted that a survey by Japan Bank for International Cooperation (JBIC) showed the Japanese chose only four preferred countries for their investments.
The preferred countries are Malaysia, Thailand, Indonesia and Vietnam and yet the four factors considered in making investment decisions were cheap labor, trainability of workers, availability of quality of management, and infrastructure.
In the first four, Hernandez said the Philippines have the upperhand and yet the country was not considered.
Infrastructure could be another story but the country’s infrastructure is a lot better than Indonesia and Vietnam.
"This is perflexing," Hernandez said.
Thus, he said, the government is trying to correct that perception among foreign investors by improving infrastructure and putting up a one-stop-shop action center for investors.
