DOING business in the Philippines should be made easier if the government wants to push economic growth past targets, business executives said on Tuesday.
While reforms such as the 2018 Ease of Doing Business Law have been implemented, hurdles such as high energy costs and an education crisis also need to be addressed, they told an economic forum organized by The Manila Times.
"Please make it easier for us to do business so that we can surpass the 6 percent [growth goal] so that we can go to 8 or 9 percent," Eduardo Francisco, BDO Capital and Investment Corp. president, said.
Two things that the government should prioritize, he said, are the country's energy and education problems.
With electricity prices among the highest in the region and supply likely to be constrained due to rising demand and a lack of capacity, "energy is the number one problem," Francisco said.
A decline in competencies among students, particularly exacerbated by a shift to remote learning during the Covid-19 pandemic, should also be fixed otherwise "we will fall behind our competitors."
Lobien Realty Group Inc. Chief Executive Officer Sheila Lobien agreed that energy was a primary stumbling block, saying that "the cost of electricity is one of the biggest concerns here in the Philippines," and is one reason why investors are hesitant.
Anna Lu, Aboitiz Infracapital Inc. water business head and Apo Agua Infrastructura Inc. president, meanwhile, said the water sector had been "largely neglected" but added that ongoing initiatives could "make it easier for the people at the water sector to do business."
All three said the government should also focus on industries that would particularly attract investors and contribute to growth, from "low-hanging fruit" such as the privatization of the EDSA Busway to business process outsourcing.
The business executives welcomed continued government efforts to implement reforms but also said the pace should be picked up. They are moving in the right direction but the question is how fast they will move," Lu said.
The economy expanded by 7.6 percent last year, surpassing the government's 6.5- to 7.5-percent target, as business operations normalized. A slowdown to 6.0 to 7.0 percent is expected this year due to global headwinds but economic managers remain confident that this target will be reached.
Francisco said he remained confident despite the threat from stubborn inflation but added that a 6.5-percent growth result could be chancy given the prospect of continued interest rate hikes.
Monetary authorities have raised key interest rates by 4 percentage points since last year, bringing the Bangko Sentral ng Pilipinas' policy rate to near 15-year high of 6.0 percent.
By Jenica Faye Garcia and Niña Myka Pauline Arceo
March 2, 2023
