After the country got its investment grade rating, what’s next? Simply put, rating upgrade is not enough, its means more work. Of course, congratulations are in order for the whole P-Noy team, especially Finance Secretary Cesar Purisima, for keeping their focus and steadfast efforts in steering the economy forward.
For the uninitiated, Fitch Ratings last month issued an upgrade of the Philippines’ position from BB+ to BBB-, the three letters signifying investment grade status. Fitch is a global rating company that keeps tabs of a company’s or country’s credit standing.
The Philippines relies on three agencies for these periodic ratings, and Fitch is considered to be the least tough. The other two agencies are Moody’s Investors Service and Standard & Poor’s, both of which have marked the country just a notch below investment grade.
Often, it just takes a bit more time before Moody’s and S&P echo what Fitch had earlier announced. Yet this should not detract our bureaucracy from continuing to get the house in order for that time when investors start pouring in.
And there is so much to do.
Higher trust
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This latest investment upgrade, for example, will persuade investors to take a more serious look at the many business opportunities that the government is offering, something that was not given much attention because of a perceived general weakness in the state’s ability to guarantee robust returns.
But since P-Noy took over the state leadership in 2010, his team has shown that it has the aptitude to keep things moving in the right direction, and more importantly, it can be trusted at the negotiating table up through operations stage.
And perhaps, trust is one of the biggest reasons that investors will be looking for before they plunk in their money on government flagship projects. And so, while we are in between presidential elections, and while the President’s trust rating continues to be high, we should convert this investor trust to concrete investments and get projects going.
Setting priorities
Priority of course will be on infrastructure, something that the government cannot do on its own given its current fiscal position. At this point in time, the Philippines will need to set up the kind of infrastructure that will bring in the most growth.
We can leave telecommunications to the private sector, even if the former competitive environment has been trimmed down from three players to just two. So what needs to be prioritized?
There is a need to nudge investors to support the power sector. Even if the brouhaha over turnkey conditions given to new investors in the power generating sector during the Ramos administration is a fading memory, it is still not forgotten.
Especially now that Mindanao is on the verge of another power crisis, independent power producers on the lookout for investment opportunities may try to force conditions that may make business sense but not necessarily be acceptable to taxpayers.
Boosting mobility
Nevertheless, back to our investment priorities, high on the list should be airports, island wharfs and docks, and yes, more roads and bridges to support the efficient flow of goods, services and visitors traveling to, out, and within the country.
For airports, this does not just mean having a fully functional gateway to Manila, i.e., operating NAIA-3 to world-class standards, but having better airports in key strategic cities for better flow of goods and improved tourism channels.
Better island ports will hopefully help in cutting down the cost of inter-island shipping, and consequently lead to lower prices of farm products from provinces outside Metro Manila and manufactured goods from major cities and suburbs.
Of course, roads and bridges are the inland arteries that play a crucial role in the pricing formula of goods and services. It would be a most opportune time to review reviving the rail system, not only as an alternative for moving people, but also for goods from the many new ports where imports and exports pass through.
Tourism roadmap
If the country is really looking at tourism as a major revenue earner, then it should focus on getting a long-term roadmap that will spell out just how much income we are expecting from various tourism-related programs such as hospices for retirement villages, dental and medical services, and the Pinoy-style spa and massages.
Of course, boosting the country’s image as a rest-and-recreation site for travel-smitten Asians, Europeans and Americans should continue to be given top priority. On this list, of course, will be destinations like Boracay, Palawan, and several other Visayan islands with fantastic beaches that just need to be spruced up to make them first-class tourist attractions.
Not just advertisements
Not just advertisements will do the trick. When tourists arrive, we should be able to give them a pleasurable stay right from the arrival lounges of our international airports down to the road trip to their hotels and finally to their R&R destinations.
This should include getting the traffic problem in Metro Manila solved.
Let’s not also forget to include the role of golf in this tourism roadmap. As an avid golfer, and having seen some of the golfing tours organized in other Asian countries, there is huge income potential for promoting local golf tours.
The Koreans are already trying to capitalize on this by organizing two- or three-day golf tours in the eastern and southern suburbs of Metro Manila. If Koreans can do this here, why can’t local Filipino tour operators do so?