Cebuanos should define, attract the right investment, and be ready when these investments come in.
Philip N. Tan, Mandaue Chamber of Commerce and Industry (MCCI) president, said the business community in Cebu is happy about the BBB- investment grade status given by Fitch Ratings to the country.
However, Tan said, wewould need to work closely with the government now to determine what kind of investments would come in to ensure a sustainable economic growth.
“We all know that at the rate we’re going now with GDP (gross domestic product) averaging at least 7 percent yearly, we are really growing fast. In fact, we are now being eyed as the next tiger economy in Asia. This is a very positive development and I can say it all started with the government’s move towards seriously eliminating corruption and announcing to the world we are ready and open,” Tan said.
He also cited the Aquino administration’s good governnance and transparency in government’s transactions resulting in an enabling environment for businesses.
“Actually the business grade is a result of all these. Now to sustain that, we must be able to define what investments we want specifically here in Cebu which is now seen as an investment hub in the country,” said Tan.
He said the government already made it clear that it would encourage more investments that would create more jobs and that would be in line with the government’s thrust towards inclusive growth–stimulating growth from the bottom up in the economic pyramid.
He said local governments in Cebu and local businessmen could set up their own investment plans around this idea.
“Each city or municipality must have their own plans so that we can attract the right investments that will help us sustain that growth,” said Tan.
Investment plan
For Mandaue City, Tan said that the local government together with MCCI represented by former president Eric Ng Mendoza was still drafting an investment plan which it hoped to finish this year.
“Initially we are looking at more investments in manufacturing because that will create more jobs especially those who cannot land a job in the BPOs,” said Tan.
Cebu Chamber of Commerce and Industry past president Prudencio Gesta agreed.
“With the upgrading of the Philippine rating under preferred investment status, this will make our country a very attractive area for foreign investments and also for tourism. Our new status will definitely place us in big radar screen to get the attention of foreign investors especially conservative businessmen that doing business here is very safe and attractive,” Gesta said.
“For the Philippines and also for Cebu, the LGUs should step up to create or enhance business-friendly environment and eliminate altogether business red tape,” he said.
Gesta said that each city or province should be ready with its investment code to easily guide investors.
Trade missions
He also called the private business sectors like the Cebu Chamber to work together with LGUs and undertake trade missions or hose foreign conferences or inbound trade missions to promote our area.
“Cebu has big advantages over other provinces to attract investors and tourists, hence, it is important the everyone must take good care of our visitors when they are in town for business or as tourists for long-term consideration,” Gesta said.
Cebu Business Club president Gordon Alan Joseph said that the immediate effect of the country’s credit rating upgrade would be an improvement in the interest rate in the country in paying its sovereign debt.
“This reduced cost of debt servicing and improved ability to borrow will increase spending in areas like infrastructure, education, health, etc,” said Joseph.
Stock investments
He also said he expects an increase in stock market investments from foreign funds.
“This excess short-term liquidity will create problems for the BSP (Bangko Sentral ng Pilipinas) and as seen, is resulting in lowering of T-bill interest rates. Theoretically this should create movement of money into more material investments.”
Joseph said he believes there would be more investments in Cebu from local companies, particularly from local entrepreneurs.
He also expects more foreign investors to notice the Philippines.
“Please note that the Fitch rating upgrade is not a magic potion for attracting investments. We need to still address the basic issues of inadequate infrastructure, lack of integrated urban planning, LGU interference in business in certain areas, the brain drain of OFWs, high power cost, traffic, the looming water shortage, etc. Thankfully, the MCDCB (Metro Cebu Development Coordinating Board) is working to address these issues but we will need to move faster,” Joseph said.
CCCI president Lito Maderazo agreed.
“This is expected and the immediate impact is probably lowering of interest and another positive growth in the stock market. This however does not give long term economic impact. The government still needs to make the country attractive to foreign direct investment. Meaning more infrastructure, lower cost and reliable power, competitive transportation costs and more importantly less red tape or ease in doing business,” Maderazo said.