Philippine Business Environment

Is the government of President AQUINO conducive to business activities? Assess the business environment during his 3 years in office. Will his call for "Tuwid na Daan" in Governance and Public Administration spell magic for its economy? Compare this environment with that of PGMA's nine year stay in power.

Site suggestions/strategy which you think could lead Philippine Business and Economy a haven of Investment climate in the future.ANSWER: As President Benigno S. Aquino III assured that Philippines will remain conducive to business, the country’s economic strides haven’t escaped notice, noting the Philippines is now rated investment grade for the first time in history by three major credit rating agencies. The economy grew by a remarkable 7.

8 percent in addition to countless other indicators of economic growth. As companies continue to reap the benefits of the Philippine economic revival, he expects the companies to also share the fruits of their hard works not only through philanthropic activities but also by setting the good example as citizens who fulfill their obligations.However, the pork barrel scam happening in the Philippines because of unscrupulous politicians, a. k. a. public servants, who instead of servicing the needs and aspirations of the people are working for their own selfish ambitions, sadly, this puts doubt now the much touted slogan of PNoy calling for a “tuwid na daan” or the straight path in his governance as militant groups have filed plunder complaints against Aquino, members of his Cabinet and business woman Janet Lim Napoles before the Office of the Ombudsman.

Unfazed about the accusation and even daring the opposition to go ahead and file impeachment charges against, Aquino painted even a gloomier picture when he recently revealed that it was worst during Gloria Macapagal Arroyo’s administration. Referring to Arroyo’s administration, during his speech before the Brotherhood of Christian Businessmen and Professionals, Aquino claimed the pork barrel scam is but a “symptom” of a bigger scheme to capture public funds.In his upcoming third State of the Nation Address (SONA), President Benigno Aquino III will surely attempt to highlight how the Philippine economy has improved under his watch to show how his administration is an improvement over its predecessor. Pres. Aquino will bring to the fore supposed economic successes such as the 6.

4% first quarter growth in gross domestic product (GDP), increased budgets for social services, expanded coverage of the conditional cash transfers, and progress under the Public-Private Partnership (PPP) program.The president may also highlight the country’s so-called creditor nation status with the International Monetary Fund (IMF). The SONA may also be an occasion to boast about more Filipinos being lifted from poverty, more lands distributed to farmers, and additional living allowances for workers. The reality behind the so-called gains must however be assessed before concluding that the Aquino administration has indeed been the much-sought change following former Pres. Arroyo’s legacy of corruption and erosion of the people’s general welfare.

Nearly ten years of the Arroyo regime saw an unprecedented rise in joblessness and poverty, growing inequality, eroding domestic production and fiscal troubles all anchored on a chain of policies that catered to local and foreign business interests. Like the Arroyo administration, the Aquino government has refused to reverse any of the neoliberal policies that have caused such damage to the economy. These policies have kept the Philippine economy underdeveloped and are designed to suit the needs of the domestic elite and foreign business rather than of the Filipino people.The entrenchment of globalization policies that have made the Philippine economy up for grabs by local and transnational firms cannot be downplayed.

The removal of trade barriers has resulted in the unabated importation of cheap goods including those which the country can produce. The Philippines now has among the lowest tariffs in Asia. Under Aquino’s term, quantitative restrictions on the importation of rice are set to be lifted in accordance with commitments under the World Trade Organization (WTO). The government has also become even more liberal towards investments in agriculture, industries and services.

Like Arroyo, Aquino has not questioned the globalization spree since way back in the early 90s until the first years of the new millennium. Key industries such as banking, shipping, telecoms and airlines were opened-up to foreign investors and crucial people’s utilities such as water and power were privatized. Philippine power and water rates are among the highest in Asia while the ordinary Filipino suffers less affordable and accessible basic utilities. Aquino’s centrepiece PPP strategy will only aggravate the inimical effects of privatization as the private sector further takes over social services as well.Like Arroyo, Aquino explicitly refused to reverse the oil deregulation law which sanctioned historic oil price hikes that drove up the prices of other basic commodities, burdening the people all the more. Aquino also would not undo the 12% value added tax (VAT) on oil which Arroyo instituted.

Moreover, his administration continues to implement the Electric Power Industry Reform Act (Epira), which after a decade of implementation has made power rates in the country among the most expensive in Asia.Following the tradition of Arroyo and the administrations before it, the Aquino government keeps debt service as the top item in terms of budget allocation while social services remain wanting and replete with cuts in important sub-items such as operating expenses and capital outlay. The 2012 budget boasted of increased allocation for social services although a large portion was for the implementation of CCTs whose real effectiveness in reducing poverty is questionable. The Arroyo government concluded its term without an assessment of the CCT program.

Yet the Aquino administration adopted it as its anti-poverty flagship, allocating even more borrowed funds to the shallow projects and heedless of criticisms from concerned parties. There are mounting accounts from the field of the anti-poor character of the CCT program. A suggestion that I may recommend that will lead Philippine Business and Economy a haven of Investment climate in the future is to have a focus on its tourism development because in time this will turn into the country’s biggest economic development.A strategy designed to increase Philippine’s visitor volume, revenue and employment through action on four key areas: 1. Leadership through partnership and coordination.

To build outstanding marketing partnership, Philippines will work with industry to coordinate marketing roles and responsibilities to reduce overlap and enhance impact. 2. Focused marketing To strengthen the marketing efforts, Philippines will deploy a combination of media relations, social media, travel trade and consumer direct marketing as appropriate by target market. 3.World Class visitor experiences To build outstanding visitor experiences Philippines has to offer, they will implement an action plan for developing and maintaining a sustainable network of recreation trails and build on an outstanding system of tourism information centers by enhancing technology infrastracture.

4. Removing barriers to growth To remove barriers and encourage tourism industry growth, Philippines will improve the timeliness of land-use decisions. QUESTION # 2: Select one (1) of the suggested topics we have discussed until the end of this semester.Look up that article and prepare a 1 page summary and your views on the topic.

Please include "Research Problem Title" which you can consider further future research study. ANSWER: ECONOMY OF THE PHILIPPINES The Economy of the Philippines is the 40th largest in the world, according to 2012 International Monetary Fund statistics and it is also one of the emerging markets in the world. The Philippines is considered as a newly industrialized country, it has been transitioning from one based on agriculture to one based more on services and manufacturing.According to the CIA Factbook, the estimated 2012 GDP (purchasing power parity) was 424.

355 billion. Goldman Sachs estimates that by the year 2050, the Philippines will be the 14th largest economy in the world, Goldman Sachs also included the Philippines in its list of the Next Eleven economies. According to HSBC, the Philippine economy will become the 16th largest economy in the world, 5th largest economy in Asia and the largest economy in the Southeast Asian region by 2050.In the year 2012 and 2013, the Philippines had posted high GDP growth rates such as 6. 8% in 2012 and 7. 8% in the first quarter of 2013, making it the highest GDP growth rate in Asia for the first quarter of 2013, followed by China and Indonesia.

The country’s primary exports are: semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil and fruits. The major trading partners are United States, Japan, China, Singapore, South Korea, The Netherlands,Hong Kong, Germany, Taiwan, and Thailand.As a newly industrialized country, the Philippines is still an economy with a large agricultural sector; however, services have come to dominate the economy. Much of the industrial sector is based on processing and assembly operations in the manufacturing of electronics and other high-tech components, usually from foreign multinational corporations. Filipinos who go aboard to work–-known as Overseas Filipino Workers or OFWs—are a significant contributor to the economy but are not reflected in the below sectoral discussion of the domestic economy.OFW remittances is also credited for the Philippines' recent economic growth resulting to investment status upgrades from credit ratings agencies such as the Fitch Groupand Standard & Poor's.

The agriculture sector makes up 12% of the GDP and employs 33% of the workforce. The type of activity ranges from small subsistence farming and fishing to large commercial ventures with significant export focus, such as major multinational corporations like Dole Food Company and Del Monte Foods.The Philippines is the world's largest producer of coconuts producing 19,500,000 tons in 2009. Also, the country is the 8th largest rice producer in the world, accounting for 2.

8% of global rice production. The Philippines is also one of the largest producer of sugar in the world according to Food and Agriculture Organization of the United Nations Statistics Division. The Philippines is a major player in the global shipbuilding industry with shipyards in Subic, Cebu, General Santos City and Batangas.It became the fourth largest shipbuilding nation in 2010. Subic-made cargo vessels are now exported to countries where shipping operators are based. Aerospace products in the Philippines are mainly for the export market and include manufacturing parts for aircraft built by both Boeing and Airbus.

Moog is the biggest aerospace manufacturer with base in Baguio in the Cordillera region. The country is rich with mineral and geothermal energy resources.In 2003, it produced 1931 MW of electricity from geothermal sources (27% of total electricity production), second only to the United States, and a recent discovery of natural gas reserves in the Malampaya oil fields off the island of Palawan is already being used to generate electricity in three gas-powered plants. Philippine gold, nickel, copper and chromite deposits are among the largest in the world. According to an IBM Global Location Trends Annual Report, as of December 2010 the Philippines has surpassed India as the world leader in business process outsourcing.

The majority of the top ten BPO firms of the United States operate in the Philippines. Total jobs in the industry grew to 100,000 and total revenues were placed at $960 million for 2005. In 2012, BPO sector employment ballooned to over 700,000 people and is contributing to a growing middle class. BPO facilities are located mainly in Metro Manila and Cebu City although other regional areas such asBaguio, Bacolod, Cagayan de Oro, Clark Freeport Zone, Dagupan, Davao City, Legazpi, Dumaguete, Lipa, Iloilo City, and CamSur are now being promoted and developed for BPO operations.