MANILA - Fiscal incentives are good but many foreign investors can also live without them as long as infrastructure improves at a faster pace, an official of the American Chamber of Commerce of the Philippines (AmCham) said Wednesday.
AmCham board member and 3M country manager Ariel Lacsamana said a lot of companies choose to invest in the Philippines because of the country's growth prospects and its labor force.
And removing fiscal incentives would not necessarily drive them away from the Philippines, Lacsamana said in an interview with ANC's Market Edge.
"It makes it less attractive but not unattractive," Lacsamana said.
The government is looking to "modernize" fiscal incentives in the proposed Tax Reform for Attracting Better and High-quality Opportunities or TRABAHO Bill.
Some business groups have warned that removing the incentives may lead firms to relocate their operations to other Southeast Asian countries.
Lacsamana, however, said many firms will choose to stay because of the Philippines' growth prospects.
"If we want to grow, this is the place where we can have a good chance of growing. Plus we've got a great labor force."
Filipinos, he said, have an advantage over other countries because of their proficiency in English and their ability to quickly adapt to new technologies.
"Absorption of new technology, new knowledge was baffling," he said.
But Lacsamana also said the country's infrastructure remains a problem.
While he lauded the government's efforts to roll out new infrastructure, this was not happening fast enough, he said. For one, port congestion remains a problem, he cited.
During the Christmas season, Lacsamana said firms were encountering delays of three to four weeks before they could get their raw materials released.
"We were hoping that that decongestion would at least start showing in the middle of last year. That didn't happen."
Logistics also remained very expensive, with shipping from Manila to Cebu or Davao reaching two-thirds of the cost of international freight.
Lacsamana said firms in export processing zones near ports were doing better as they could avoid congestion.
Electricity was also a concern for foreign investors as the cost of power in the Philippines remains one of the most expensive in the region.