Marcos govt. to continue courting more foreign investments | The Final Word
The Marcos administration hopes to court more strategic investments in its second year. How can it better attract business from Europe?
European Chamber of Commerce president Paulo Duarte joins us live in the studio.
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European Chamber of Commerce president Paulo Duarte joins us live in the studio.
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NewsTranscript
00:00 Marcos administration hopes to court more strategic investments in its second year.
00:04 How could it better attract business from Europe?
00:08 European Chamber of Commerce President Paolo Duarte joins us now live in the studio.
00:13 Senor, thank you so much for joining us on the program.
00:16 Thank you.
00:17 You heard the one hour and 11 minute speech of the president.
00:21 He talked about investment pledges from Europe and from around the world.
00:25 Will this encourage more European investors to put their money in the country?
00:33 I think the results inspire confidence.
00:35 I think the Philippine economy is doing quite well with regards to the GDP 2022, 7.6 percent,
00:44 then also in 2023 a very good start, being the number one in the top 50 GDPs in the world.
00:51 So we are confident that the measures that Marcos administration put in place will bring
00:59 into fruition the pledges that have been made.
01:05 What will European investors want to see on the second year of the Marcos Junior administration
01:13 to really say this is the place in Southeast Asia we want to put our hard earned euros?
01:21 We have to go back to see what the current administration as well as the previous administration
01:27 did to open the Philippines to the external investors.
01:32 We talk about, we have seen the Public Service Act, the Retail Liberalization Act, the Investment
01:39 Trade Act.
01:40 These are all measures that open the Philippine economy to the exterior, to the foreign investments.
01:46 I think in the sequence of the good results that we have seen also in 2023, I think the
01:51 European will want to continue to see the implementation of the measures as well, ease
01:59 of doing business.
02:00 I think that is still an area that needs to improve.
02:05 We have now Harta, Harta is a good way to reduce the inefficiencies in the administration.
02:16 Also digitalization, data driven decisions helps also to reduce corruption.
02:22 So all these developments are positive and will inspire the foreign investors.
02:30 Mr. Duarte, those are quite a number of prerequisites for European investors to directly invest
02:40 in the Philippines.
02:41 Are we really seeing progress on this front and are we already towards that point where
02:47 European investors will say now is the time?
02:50 Now is the time because the measures have been implemented.
02:53 We have also to see that Philippines is the second largest market in Southeast Asia, 170
02:59 million people with an average age of 25 years old is a very attractive market and we cannot
03:05 neglect that.
03:06 So the measures that I just mentioned just a while ago makes the confidence of the foreign
03:12 investors in the country because there is a lot of potential in the Philippines that
03:16 needs to be exploited.
03:17 And Mr. Duarte, I'd like to raise a point which the President did not mention in the
03:22 State of the Nation Address and that is the decision of the International Criminal Court
03:28 and its investigation on the drug war during the previous administration.
03:34 Does the lack of accountability especially on human rights risk the Philippines' EU trade
03:39 purse with the generalized scheme of Preferences Plus or the GSP Plus?
03:45 The GSP Plus is currently on an extension proposal.
03:49 Until the end of the year?
03:50 And there is also possibility to extend for another term.
03:54 This is still on the table and the Marcos administration has made efforts also and I
04:00 think this was addressed today with regards to reduction of the corruption as well also
04:06 to continue the approach to the drug dealers but in a different way.
04:13 So in a more social way.
04:15 I think these words resonate in the European Union and this can also address the question
04:24 that you just mentioned before.
04:25 Because the EU's Special Representative for Human Rights has raised concerns about the
04:30 very few number of convictions for drug war killings and this could be connected to the
04:37 extension of the GSP Plus.
04:41 So long the administration is making the effort I don't think this will be a block on the
04:45 road.
04:46 So we have the GSP Plus extension.
04:50 We also have possibilities of the free trade agreement to resume the negotiations for European
04:57 Philippines.
04:59 I think these are possibilities that are on the table and definitely this topic that you
05:03 have mentioned should not be a block on the road.
05:05 Oh that's very good news.
05:08 The free trade agreement between the EU and ASEAN or with the Philippines, when is this
05:13 likely to materialize?
05:14 It's been in the works for more than a decade.
05:18 What is the future of this free trade arrangement?
05:22 The negotiations need to resume.
05:23 I think that's currently what is the next step.
05:29 The European Union has been watching what is the performance of the country, what are
05:34 the measures that the Philippines is implementing and all of this we have seen in vast majority
05:39 during SONA this afternoon.
05:43 We expect this resume of the talks for the FDA to be very soon because now the conditions
05:51 are created.
05:53 Over the past year we've seen President Marcos Jr. making more than a dozen trips overseas
06:00 and this includes trips to Europe and he paraded during SONA that there have been pledges of
06:09 73 billion dollars.
06:11 How much of this is from potential European investors?
06:17 The pledges that not only President Marcos but also recently DTI Secretary Pasqual has
06:26 been on tour over five countries, almost three weeks, and they collect the pledges in the
06:32 amount of 73 billion, 1.25 billion euros in European currency.
06:42 These are already, some of them are already concrete.
06:46 We have the case of a German investor in the renewable energies.
06:50 I think also the liberalization of the renewable energy sector has been seen as positive and
06:56 this has opened the eye for foreign investors that have experience on renewable energy sector
07:02 that see this opportunity to come to the Philippines and execute their know-how and capacities.
07:08 I think this is not only in the air but is already with a certain level of hardness grade,
07:17 high level of hardness grade.
07:18 So Mr. Duarte, apart from the renewable energy sector which there's a lot of interest from
07:24 European investors, in which other sectors are European investors interested to make
07:30 that foreign direct investment in the Philippines?
07:34 There are multiple areas.
07:35 We can also talk for instance in the factory automation, Industry 4.0, in the area of digitalization.
07:43 There is plenty of opportunities that can be exploited and I repeat, we are talking
07:48 about a market of 170 million people, average 25 year old.
07:55 So that's still a very young demographics and this boosts the potential of the foreign
08:04 investors because they have to put investments where it's worthwhile and I think Philippines
08:10 is the place to be.
08:12 All right.
08:13 Everyone is talking about the controversial Maharlika Investment Fund.
08:17 In Europe, you have some of the biggest sovereign wealth funds there.
08:21 What can the Philippines learn from the sovereign wealth funds of Europe?
08:26 Well, it all boils down how the management of the fund will be and which focus areas
08:34 the fund will go for.
08:36 The focus area here is more on infrastructure.
08:39 Infrastructure, this is possibility to attract investment but we from the ECCP side, we don't
08:46 get yet the full visibility.
08:48 So as of now, I'm not able to make a big comment because I also need to see more how the fund
08:54 will be structured.
08:55 So it's still a bit too early for us to comment.
08:57 And what is your expectation of the Marcos Jr. administration over the next year after
09:03 listening to his first State of the Nation last year and his second SONA?
09:09 So first of all, we have a strong tailwind in terms of the results.
09:12 So we see the GDP I mentioned before, we see also the inflation is easing which might also
09:18 be influenced by the central bank rates that are currently at 6.25, also to protect the
09:26 peso devaluation.
09:28 I think what we want to see is the continuation.
09:31 We want to see the execution part to continue so that's not only states on the theoretical
09:39 side but also boils down to the execution.
09:42 But I think President Marcos mentioned that it's important to collaborate, that the agencies
09:49 collaborate with each other, that the agencies also collaborate with the private sector,
09:54 that the academe also cooperates with the government, also with the private sector.
10:00 It's all about collaboration and not see this one by one.
10:04 All together we can get synergy effects and the synergy effects is what brings the execution
10:10 forward.
10:11 So from what you have seen over the past year, is the political will there for this administration
10:19 to push through and execute the programs that they have started?
10:25 The answer is yes.
10:27 From the ECCP side we have been in contact with several administrations.
10:31 They have been very supportive.
10:33 They are willing to listen what the private sector has to say, what the European companies
10:38 have to say, so that they want to get our recommendations, even to propose memorandums
10:47 of understanding between the chamber and the agencies.
10:51 So there is willingness.
10:53 Also the fact that President Marcos has been in Brussels last December and that the DTI
11:01 Secretary has been on tour over Europe, that shows the willingness.
11:05 And I think this collaboration plus willingness to increase the competitiveness of the Filipino
11:12 economy, I think this will bring us to the next level and I think that's what we expect
11:16 to see.
11:17 This is very good news and bodes well for Europe-Philippine relations.
11:22 Thank you so much for joining us on The Final Word.
11:26 President Paolo Duarte from the European Chamber of Commerce.