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WikiLeaks document notes disincentives to investing in the Philippines

Thousands of documents pertaining to United States officials’ views on the Philippines have been released by WikiLeaks, among them a fairly recent report — attributed to the embassy in Manila — describing the local investment climate as plagued by “legal restrictions, regulatory inconsistency and lack of transparency”.

The unclassified document dated January 25, 2010 identified the Philippine Economic Zone Authority as a “noteworthy strength” along with the country’s “well-educated and English-speaking labor pool,” but also noted that weak public institutions had repelled foreign businesses.

The report, in particular, states that “many foreign investors describe the inefficiency and uncertainty of the judicial system as a significant disincentive for investment”.

The legal system’s shortcomings were said to be the result of “…judges rarely [having] a background in, or thorough understanding of, market economics or business, and that their decisions stray from the interpretation of law into policymaking”.

The inability of the government to uphold the sanctity of contracts, it said, had led to a “clouded investment climate,” while the ineffectiveness of the Intellectual Property Office of the Philippines to restrict and seize pirated goods has gotten the country into the US Trade Representative Special 301 Report.

Corruption, meanwhile, was described as a “pervasive and longstanding problem” because “the enforcement of anti-corruption law has been weak and inconsistent”. The report also noted that the Philippines “is not a signatory of the Organization for Economic Cooperation and Development Convention on Combating Bribery.”

Inefficiencies in agencies concerned with business registration, customs procedures, and immigration have also been “a source of frustration” for many US investors.

“To counter this, some agencies, such as the SEC (Securities and Exchange Commission), BoI (Board of Investments) and the Department of Foreign Affairs, have established express lanes or ‘one-stop shops’ to reduce bureaucratic delays, [but] with varying degrees of success,” the report states.

Officials from the US Embassy and the government were not immediately available for comment.