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Changing the rules
Michael Alan Hamlin
No way to attract investors...
When the Philippines' Supreme Court struck down a presidential proclamation granting investors in the Clark Special Economic Zone investment incentives in 2005, foreign investors, chambers of commerce, and business leaders were horrified. The Bureau of Internal Revenue quickly announced it would collect back taxes from locators causing further dismay and generating considerable negative publicity for the Philippines.
It was not until March 2007 that Congress passed and President Gloria Macapagal-Arroyo signed into law legislation creating the Clark Freeport Zone and restoring incentives. The new law also granted amnesty to investors registered with the Board of Investment (BOI) or Philippine Economic Zone Authority (PEZA), assuring investors that the terms under which they made their original investments would be honored.
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Posted
5/28/2008 3:31:46 PM |
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Improving competitiveness?
Michael Alan Hamlin
The Philippines is accountable for its success... or failure
Late last week, the Institute for Management Development (IMD) announced the latest update to its annual World Competitiveness Scoreboard (subscription required). The Scoreboard ranks the competitiveness of 55 countries. Although the Philippines ranks in the bottom third of the ranking, it moved up five places from 45 to 40. Its improved competitiveness was attributed to record economic growth and an improved image, according to reports.
While it is important to celebrate victories, even little ones, it’s also important to examine them dispassionately. This is particularly true in the case of the latest IMD results. For one thing, the Philippines has, realistically, moved back up to the starting line, not past it. After all, it also ranked 40 in 2005, a year in which “Hello Garci” ringtone downloads reached a fever pitch, President Gloria Macapagal-Arroyo launched a movement to overhaul the constitution, and Forbes named Ms. Arroyo the fourth most powerful woman in the world nevertheless. And in that year, the Philippines received less than P2 billion in foreign investment, less than all its Southeast Asian neighbors.
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Posted
5/21/2008 12:47:52 PM |
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Investors: Corruption Unnecessary
Michael Alan Hamlin
And there should be one set of rules only...
Doing business in the Philippines successfully doesn’t require investors to offer and pay bribes to political and bureaucratic officials, according to a group of investors and long-term residents I met with earlier this week. Unfortunately, I can’t say much about the meeting or the actual participants since I haven’t been given permission to do so, but they represented an influential group of U.S. and Filipino business people and U.S. officials.
According to Transparency International, the Philippines ranks as one of the most corrupt countries in the world. In its most recent ranking, the Philippines ranked 131 - tied with Yemen, Burundi, Libya, Iran, and Honduras - out of 179. Negative perception of the Philippines explains why it is largely shunned by foreign investors. According to the IMD World Competitiveness Report (subscription required), the Philippines ranks a distant last in FDI inflows to Asia Pacific nations. In Southeast Asia, only Cambodia, Laos, and Burma attract less investment.
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Posted
5/15/2008 1:17:27 PM |
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Truly global
Michael Alan Hamlin
Thomson Reuters is really big
Last week, Thomson Reuters reported “solid first-quarter earnings results from pre-merger operations,” according to news reports. Just three weeks ago, Thomson announced that it had completed its acquisition of Reuters, making the combined company the world’s largest provider of information to business and professionals. Thomson Reuters has more than 50,000 employees and operates in 93 countries on six continents. Its 2007 pro forma revenue was approximately US$12.4 billion.
Twelve thousand of the company’s employees are in Asia, and 1,100 of those work in the Philippines creating content and software for Thomson Reuters’ clients around the world. Two weeks ago, Devin Wenig, CEO of the company’s Markets Division - which accounted for $7.5 billion in revenues last year - visited Manila and met with Thomson Reuters employees and media. Wenig, who is 41, was COO and a board director at Reuters before the merger. (Disclosure: Thomson Reuters is a client of my firm.)
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Posted
5/7/2008 4:33:04 PM |
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Prioritizing relationships
Michael Alan Hamlin
Is a fact of life...
Two events in the news this week are receiving deserved attention from policymakers in Manila and Washington. The first is the approval by the U.S. Senate of veterans’ benefits for Filipinos who fought for America against the Japanese during the Second World War. The second issue is the saga surrounding US$100 million that was intended to go to health benefits for U.S. veterans living in the Philippines but instead was ripped off in a local scam. Both are best viewed in context of how the relationship between the Philippines and the United States is developing-or, as the case may be, is not developing.
Typically, no official voices on either side of this Pacific alliance will ever publicly cast doubt that the century-old relationship is solid no matter what the circumstances. No doubt, both nations have stood together for mutual benefit during some rocky times such as World War II, the Cold War and the current war against Islamic extremism. Circumstances can change, however, as some fear they may be at the current time. How Manila manages this important relationship now could have a major impact for a generation.
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Posted
5/7/2008 4:24:28 PM |
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