An Invitation to Invest in the Philippines
Why invest in the Philippines today? First,
a new Administration has been voted into power in a
smooth transition, highlighting the vibrance of democracy
in the Philippines. We have a popularly-elected President
who is able to communicate effectively with the great
masses of our people, and consequently gain their cooperation
and forbearance for the sacrifices to be made.
Second, our banking and financial systems
are basically sound. While banks have some exposure
to risk, this exposure does not run as high as in other
countries in the region. The ratio of non-performing
loans in the entire system’s loan portfolio is
presently 9.6 percent, second-best following Singapore,
and far below the 18 to 50 percent rates presently recorded
in the region.
Third, our foreign debt is manageable
so far. Our debt service ratio of principal and interest
payments to exports of goods and services is 9.9 percent.
Fourth, our exports continue to perform
well, expanding 20 percent for the first nine months
of this year. Combined with the drop in imports, our
trade deficit has shrunk and the current account and
balance-of-payments situation have significantly improved.
Fifth, the new Administration has continued
the pursuit of structural reforms of deregulation, privatization,
liberalization, and other free-market policies.
The results have been encouraging.
- The inflation rate for the first nine
months (ending September) has remained at 9.4 percent
for the year.
- Except for the seasonal high of 13.3
percent in April, the unemployment rate has gradually
dropped to 8.9 percent in July, the latest figures
available.
- With the exception of the national
airline, the industrial front has been more peaceful,
with fewer strikes and fewer workers involved in strikes
in July and August 1998 as compared to the same period
last year.
- Interest rates have declined since
the beginning of the year, with the bellwether 91-day
Treasury Bill rate dropping to under 14 percent this
week (e.g., first week of October).
Thus, the consensus forecast for East
Asian growth in 1998 currently points to the Philippines
as having the second-highest growth rate in the region,
second to Singapore.
Two other factors make the Philippines
a practical choice for your investments. One, the pool
of labor available for you businesses is large and can
address your companies’ needs at many levels –
from the rank-and-file, to middle management, to senior
executives. Giver proper training and management, this
labor pool can be one your most productive worldwide.
Labor is generally well-educated, highly-trainable,
and highly-literate in English.
Finally, the amenities and welcoming environment
of the Philippines makes it easy for foreign executives
and their families to relocate here. Housing, education,
and services are just some of the pluses which make
executive life in the Philippines a pleasant experience
and your investments a rewarding one.
RICARDO J. ROMULO
Chairman
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