AN international trade lawyer said the Philippines should focus on simplifying its rules to lure investments, among others.
“As a lawyer, it’s actually the simplification of the rules that will lead to investments. They will not come here and look and the first thing they see is a 60-40 requirement in the Constitution even if this doesn’t affect the investor. It scares them away immediately and that’s why you have to simplify all these rules,” Anthony Abad, international trade lawyer and CEO of Trade Advisors said at the National Export Congress 2022 in Pasay City on Wednesday.
Abad cited Vietnam, which he said had simplified its laws in 2015 “just so the investors won’t have to deal with so many rules.”
Meanwhile, he also underscored that investment policy has to go hand in hand with export policy, noting that these policies will make investors decide if a country is “stable” and worth investing in. Investors eye a certain country that is the “most stable and that brings back the most returns,” Abad pointed out.
“So when I observed the people who want to make an investment toward export, will choose let’s say Vietnam or the Philippines based on what they see as least risk, highest return place. They will move back to their own country if they think it’s going to be most beneficial to them,” he added.
This, Abad said, is coined as “reshoring” which he said has been the trend since the pandemic has caused uncertainties in the global value systems. The international lawyer defined reshoring as “an insurance measure that’s mitigating risks that are given because there’s a logistics challenge.”
According to Abad, certain countries consider bringing back their manufacturing or are onshoring their manufacturing so as to lessen the risk.
As for the Philippines, he said the country is not too invested yet in regional and global value chains, adding, “the Philippines did not have to worry about the crisis because it never left the port.”
In terms of export development, Abad said the country has to go beyond “building roads” and simply hope that exports will come someday. Instead, he said, the Philippines should look at agriculture as a manufacturing process because the end product is the one that’s going to give the highest value once the exportable goods have reached the global landscape.
He cited Korea as an example: it does not only sell sweet potato in itself but has added value to it by selling Japchae, a popular Korean dish that’s made from sweet potatoes.
Korea, Abad noted, also invested in the creative aspect and cultural side of its country. “They want to sell, so there’s a valuation involved whether it’s a creative, service or agricultural product. You have to really look at the end-game.”