Philippines – a key market for Global Investors

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RP a key market for global investors—UK exec

MANILA, Philippines—The Philippines ranked 9th among key emerging markets for global investors in 2009, jumping 14 spots from 23rd place the previous year, according to new research published by UK Trade & Investment.

“The global recession was a wake-up call for companies to diversify their export base and seek out new opportunities in the emerging world. We are encouraging UK business to look to the Philippines and find new business in this exciting new market,” British Ambassador to the Philippines Stephen Lillie said in a statement released to media outfits.

According to an embassy brief, the United Kingdom is the top net foreign direct investor in the Philippines, investing $298.17 million last year. There are currently around 200 British companies active in the Philippines, ranging from big multinationals to small and medium enterprises (SMEs).

According to the same brief, President Gloria Macapagal-Arroyo in March this year delivered a keynote message during the Emerging Markets Summit which might have helped put the Philippines in the radar of British businessmen.

Over 300 business leaders and investors from all over the world participated in the forum, giving her the opportunity to share the Philippines’ view on Asia’s leadership in the global economic recovery and to promote the Philippines as an investment destination.

In that forum, Arroyo highlighted the resiliency and continued growth of the Philippine economy, which posted a 1.5 percent economic growth in the second quarter of 2009.

Addressing the Economist Intelligence Unit’s Emerging Markets Summit Thursday, UK Secretary of State Lord Mandelson revealed the findings of a new report which examines global business attitudes to emerging markets in light of the global downturn.

“The report we’re publishing today has a few basic messages. First, the basic conditions in the emerging economies are varied and not universal. China and India have continued to grow rapidly, although at less than the trend rate of the last decade. Other parts of the emerging world are also performing well relative to the rich world, but well below recent trend,” Lord Mandelson said.

“On a more positive point, most of the 500 plus companies surveyed by the report are cautious about quick recovery but they were very positive about the long-term potential of the emerging economies,” he added.

The survey found that 77 percent of companies expect the prospects for the global economy to improve in 2010-11. Sixty percent of companies surveyed expected to derive more than 20 percent of their total revenues from emerging markets in five years’ time—almost double the current figure of 31 percent.

However, political risk, including the risk of nationalization and expropriation, was cited by 50 percent of survey respondents as the greatest government-related obstacle to doing business in emerging markets.

In the Philippines, local and foreign chambers highlighted the need for continued reforms despite significant progress. The chambers jointly submitted to government a list of 10 pieces of legislation which they believe will have significant positive effects on the Philippines investment climate.

Despite the economic downturn, emerging markets support global profitability. Emerging market economies, on the back of the continued high growth and market size of China and India, have outperformed those of developed countries in 2009.

Commenting on the research Lord Mandelson said, “It’s clear that many British businesses have been able to hedge their recession performance thanks to a strong presence in the emerging economies. And they do see a long game in which WTO-membership and improving legal and commercial environments will make it easier to do business there. Certainly, growing and increasingly prosperous populations make these markets a huge potential source of growth and jobs.”

Robert G. Sarmiento Properties
Real Estate Broker’s Association of the Philippines
President, Greenhills Chapter
REBL # 16123
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