The Philippines cannot afford to be complacent despite its standout growth of 6.6 per cent in 2012 but rather should push harder to improve its investment climate and sustain growth.
This assessment came from Minister Akio Isomata of the Japanese Embassy’s economic section in an interview last Thursday, March 14.
Minister Isomata said that despite its impressive economic performance in the last two years, the Philippines still lags behind stronger Asian countries.
“You can’t just sit there. … And now is the chance because the investors, the donors, are looking at the Philippines right now, so this is the chance to do something. This is the best time to do something,” he said
He explained that action needs to be taken on major concerns among Japanese investors including a congested logistic infrastructure, including roads and airports; expensive and unstable power supply; and the delayed release of tax refunds to businessmen.
“There’s so much congestion in Manila and the economic loss for that is huge. The solution is in the hands of the Philippine government, how to solve this issue,” said the embassy minister.
Japan is also hoping for the timely release of Value Added Tax refunds to Japanese companies in economic zones and a stable and affordable power supply, whose current rates are known to be the most expensive in Southeast Asia.
“We’d like to see stable supply of electricity at a reasonable price for inviting more investment from Japan. And that’s a very serious concern for Japanese locators here in the Philippines. I think for the time being it’s still OK. But I’m not sure [what would happen] in 2015, 2016 if we do nothing now. The price is exorbitant right now,” Isomata said.
Isomata also called for the “upgrade of the treatment” of people in government. He said that to mobilize the bureaucracy, employees should be compensated better.
Japan has been a leading economic and development partner of the Philippines. It is also the largest source of official development assistance.