Investors keen on PHL but seek stable rules, lower costs - Kearney

FOREIGN INVESTORS are eager to tap into the growth potential of the Philippines but concerns over unpredictable regulations and high cost of energy and logistics persist, according to executives of global management consulting firm Kearney.

- By Beatriz Marie D. Cruz Reporter

In an interview with BusinessWorld, Shigeru Sekinada, Kearney senior partner and region chair, Asia-Pacific, and managing director, Japan, said foreign investors are looking at the Philippines as they diversify their manufacturing operations.

“In this context, each country needs to have predictable rules, governance, laws, and so on. This kind of element is among the most important, for the longterm perspective is necessary for the manufacturing sector,” Mr. Sekinada said.

“If they decide to invest in a factory, and this factory needs to run maybe 10 years, 20 years, 30 years. So, this kind of long-term predictability is very important.”

Lowering the cost of doing business would also encourage more foreign investors to expand operations here, Mr. Sekinada said. He noted investors look at the cost of logistics and energy before investing in a country.

“If the country has low-cost energy, low-cost logistics infrastructure, surely outside companies will be able to consider the Philippines as the best location for the manufacturing sector,” he said.

Mr. Sekinada said the Philippines has the potential to attract Japanese investment in sectors such as manufacturing, energy, consumer goods and retail, and healthcare.

"As you know, Japan's market is shrinking. On the other hand, your market is growing. That's why Japanese companies tend to think about expanding their business in the consumer goods and retail sector," he said.