Monday, 28 May 2012
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Philippines: Visit of the Lord Mayor of London: 20-22 May: Scene setter – May 2012
British Embassy Manila
Lord Mayor visits Philippines against backdrop of relative economic and political stability. High-level political and business engagements will help affirm the UK as a centre of excellence for financial and professional services, at a time when the administration is seeking to boost infrastructure and enhance the country’s reputation as a place to do business.
The Lord Mayor will visit Manila on 20 – 22 May. His programme includes calls on the President, the Secretary of Transportation and Communications, and the President of the Asian Development Bank. He will meet the Secretary of Finance and financial sector leaders over dinner, will open trading at the Philippine Stock Exchange (one of Asia’s top performing bourses) and will speak at mealtime engagements with the business community.
The Lord Mayor visits the Philippines almost two years into President Aquino’s administration. Since taking office, Aquino has prioritised the fight against corruption, one of the biggest deterrents to foreign business here. The economic team lead by Finance Secretary Purisima has restored stability to government finances, reducing the budget deficit to about 3% of GDP. The ratings agencies recognised these achievements with successive upgrades last year: the Philippines is now just a notch below investment grade. Economic growth is solid. It fell below 4% last year, and may be 5-6% this year. HSBC has predicted that the Philippines could become the world’s 16th largest economy by 2050 (it is 43rd now): but that will require consistent growth rates of 7% or more.
Philippines and UK Prosperity
UK business is solidly positioned in the Philippines, where we’re the largest EU investor. Major UK companies include Shell, Unilever, HSBC, Standard Chartered and Prudential. But overall FDI levels in the Philippines are significantly smaller than in other big ASEAN economies. This reflects a range of problems, from protectionist laws to poor infrastructure, red tape and high power costs.
Aquino recognises the challenges and is working to improve the Philippines as an international business location. PPP is one of his the flagship initiatives. Key projects are planned for roads, ports, airports, rail, health, education, power and agriculture, with an estimated value of USD 15.6 Billion. We are helping UK companies to pursue related opportunities at various levels, whether through partnerships for government tenders or supply of services to local infrastructure companies. We have shared thinking with the Government on approaches to PPP, including through workshops last year involving Infrastructure UK.
Other key sectors of opportunity for UK companies include education, healthcare, ICT, construction, power, environment, retail and tourism. But Business Process Outsourcing is the Philippines’ real success story: it has overtaken India in terms of “voice” BPO (eg call-centres) and is number two for non-voice BPO. UK companies are active in this sector, including HSBC, Shell, and FT.
There is a small amount of inward investment from the Philippines to the UK. Bank of the Philippine Islands has its European HQ in London. Philippine National Bank has remittance offices there. The Philippine banks are drawn to London in part because of the 250,000 strong Filipino community in the UK. Global remittances from Filipino workers overseas are worth about 10% of GDP and are a major driver of economic growth.
The UK and the Philippines enjoy a close and substantive bilateral relationship. The Filipinos appreciate the increased emphasis that HMG is paying to South-East Asia as part of our Emerging Powers Initiative. There are many other areas of co-operation include climate change, human rights, good governance andconflict resolution in Mindanao. The British Council runs an extensive programme of English language examinations for Filipinos looking to study and work overseas.
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