Bullish on inward investment
A CRUCIAL factor in ensuring these green shoots of prosperity develop into meaningful growth is to keep inward investment coming. The head of the inward investment agency in the Philippines strikes a similarly bullish tone to that of P-Noy.
Dr Lilia de Lima has been the director general of the Philippine Economic Zone Authority (PEZA) since its creation in 1995.
This body is the government agency tasked with promoting business opportunities in export-oriented manufacturing and service facilities inside selected areas throughout the country’s PEZA special economic zones.
“In our 17-year history we had the biggest jump in investments last year, a 41 per cent increase, even from a high base in 2010 and despite the global financial crisis. I’ve never been as bullish as now,” she says.
She is speaking at the launch of Irish company CF Tooling’s new steel service centre in Cavite, a PEZA industrial zone outside Manila. There are more than 2,700 companies inside PEZA zones, and 87 per cent of exports are from PEZA companies.
A major positive is that labour relations are much better than in some other states such as China, which has had labour issues in the past few months. China does not allow independent trade unions, but the Philippines does. “In the past seven years we had only three full-blown strikes, compared to Vietnam which had 336 wildcat strikes in the first three months of last year. Knowing what’s going on in our competitor economies, I’m very bullish.”
PEZA is looking at all sectors for growth, with the fastest growing sector in IT. “We learned from Ireland. The IT sector gets most of our college graduates,” she adds. “Eight years ago China was my nightmare, everybody wanted to go there. Then came Vietnam. They had low rates, labour rates. Suddenly, in a short space of time, the rates have gone up so fast. They have problems with retention of people – some companies lose one third of people after Lunar New Year. You’d never have that here, it’s very stable.”
A major challenge for the Philippines is the fact that it is geographically so dispersed – with more than 7,000 islands.
The youthful population is an advantage, she adds, especially as regional rivals such as China are seeing a rapidly ageing population because of the One Child Policy. “Our only setback is our high power costs.”