Corporate leaders have proposed solutions to problems hounding the business sector to encourage more investments in the Philippines.
The business leaders engaged in a panel discussion during Stratbase ADR Institute’s annual Pilipinas Conference on Wednesday and discussed the contributions of the private sector to the country’s economic development.
During the panel discussion, Ayala Corporation President Bong Consing urged the government to address what he called the “hidden costs” of doing business in the country that are burdening businesses, especially those with small margins.
“Because what we find here is, there are a lot of unwritten hidden costs to doing business. And they›re at the national level. And more recently, we see them more at the local level… Because in many of these businesses, margins are very thin. Right? And you need leverage on top of that. The room for error is actually not that wide… I think it›s a real detriment to investmen. So I see that as the biggest issue,” Consing said.
Consing urged the government to ensure consistency in policies, which he said tend to change when administrations also change.
“There has to be some rules set today that you know will survive whoever is in office three or four administrations from now… If you really want investment, if you really want growth, you have to play the long game. Right? And if you›re the government, and you want the private sector to play the long game, you got to be fair, right? You better be consistent,” he explained.
ICTSI Global Corporate Head Christian Gonzalez said there is a need to strengthen the relationship between businesses and local government units including the barangay level.
“There’s quite a relationship of trust between us [business sector] and national regulators. However, there is still a need to address the problem of friction regulation in the local government level, down to the barangay. There are times when billions of dollars of investments from the public and the private sector are put on hold due to these issues,” Gonzalez said.
Moreover, Gonzalez also suggests incentivizing private companies that can provide additional training to Filipino workers to increase productivity and efficiency.
“We have this tremendous young workforce to tap from, but they need to be trained, they need to be educated. Private sector can be given incentives through tax breaks, or whatever else it is, to train people… But [it entails cost]. The only way it becomes cheaper or neutral or just slightly more expensive, is if there is an incentive from the government. So they need to recognize it, and they need to develop legislation that supports the training that all of us could do,” Gonzalez explained.
For Acciona Southeast Asia Regional Director of Infrastructure, Ruben Camba, the right of way issue is a critical problem that has been causing delays on infrastructure projects.
“I will talk about the biggest challenge for us today. That is resolving the right of way issue. Because when you think about a piece of infra like the North South Commuter Railway, that is 150 kilometers. We are talking about in the billions of dollars. Those delays are also a cost for the country,” Camba said.
“So I feel that we should be putting more effort if we want to develop this country in terms of infrastructure, in terms of linear projects, addressing the right of way. That’s, from our point of view today, what companies like us are suffering the most,” he added.
Metro Pacific’s Director for Government and Public Affairs Atty Mike Toledo, echoed Camba’s sentiment.
“Right of way is indeed one of the major problems that we face. And perhaps it should always be remembered, and perhaps government should always remember, that any delay in a project caused by right of way issues would mean, of course, an increase in project costs. And any increase in project costs would somewhere along the way be passed on to the consumers. So it’s really a situation that needs to be handled,” Toledo said.
In a video message, Ayala Corporation Chairman Jaime Augusto Zobel de Ayala emphasized the importance of the private sector in ensuring robust and inclusive economic growth.
“I share the belief that the private sector with its agility, its resources, and network is uniquely positioned to significantly impact our inclusive and sustainable economic growth ambitions. And subsequently, ensure the country’s stability and security,” he said.