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Management Association of the Philippines president Salazar believes amending the country’s investment law would attract more foreign investors and boost the manufacturing sector.

AT LEAST five members of the Association of Southeast Asian Nations (ASEAN) are well advanced in their preparations for the coming economic integration of the region in 2015, but the Philippines is not ready because of other issues that had diverted its attention, according to a local business leader.

Singapore, Malaysia, Thailand, Brunei are ready for integration and Vietnam is also rushing structural reforms to harmonize its trade policies with those of its peers, but the Philippines is still stuck with trade barriers that pose a challenge to foreign investors, Melito Salazar Jr., president of the Management Association of the Philippines, told PortCalls.

He was speaking on the sidelines of the two-day 2013 Procurement and Supply Institute of Asia World Annual Procurement and Supply Management Conference at the Marriott Hotel that opened on Nov. 21.

Individual ASEAN members have agreed to integrate their economies in 2015, just more than a year away, by liberalizing trade, investment, tourism, mobility of labor and other sectors such as tourism among the 10 countries that make up the regional grouping.

Salazar said various industry groups are rushing preparations but their different approaches, natural calamities and political distractions resulted in uneven progress in their march towards compliance with the requirement of the integration goal.

“The Arroyo government wasted a lot of time fighting for political survival and neglected preparations for 2015,” Salazar said.

“While the rest of ASEAN was getting ready, our attention distracted by other issues such as the 2004 election” that saw Gloria Macapagal Arroyo’s controversial winning of the presidency.

Salazar said among the industries that will be ready by 2015 is the tourism and engineering sectors, while manufacturing and education will fall behind.

“The MAP has been pushing the government to speed up its preparations,” Salazar said. “Come 2015, local businesses will not be able to compete against regional competitors,” he said.

“If we can’t compete, we can gain from economic integration by making the country conducive for foreign companies to come in,” Salazar said. This, he said, can be done by amending the country’s Foreign Investments Act to liberalize the entry of foreign investors.

At the PASIA event, where he was a guest speaker, Salazar updated delegates on preparations made by individual ASEAN members and the impact of economic integration on the Philippine procurement and supply management industry.

Preparations included investment in other ASEAN countries, buying multinational operations, developing manufacturing and industrial bases, strengthening national competitiveness and increasing citizens’ awareness and knowledge about member countries.

For example, he said, TV stations have programs featuring other ASEAN countries and newspapers devoting pages to news from other parts of the region.

“These preparations for 2015 have led to the region’s resilient recovery from the global and Asian financial crises, sustained economic growth, and transformed them into regional manufacturing and financial hubs,” Salazar said.

He also noted the strong recovery of the region from natural disasters and forecast that the country will rebound from the effects of the recent Supertyphoon Haiyan (local name Yolanda), whose fury leveled towns and cities, killed over 4,000 people in Central Philippines, and caused economic losses estimated at P604 billion.

“After what happened to us, we will be able to get back on our feet,” he said, citing the experience of Bangkok during the months-long flooding in the city that halted production in its foreign-owned factories, causing supply shortages overseas.

Salazar expects the Philippines to sustain its growth this year, in line with the region’s projected growth rate of 5.3% to 6.0% in 2013, compared with 5.7% last year.

Salazar said the ASEAN Five – Indonesia, Malaysia, the Philippines, Singapore and Thailand – is expected to grow 5.2% to 6.0% this year, while Brunei, Cambodia, Laos, Myanmar and Vietnam are forecast to pull off 5.5% growth.

Opening the conference was PASIA chairman and CEO Charlie Villaseñor, who said that the association is planning to expand its training activities for supply management professionals to Latin America and the Caribbean in the coming years. — Text and photo by Vir Lumicao

 

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