It has also focused on pushing through reforms, such as the 2017 Tax Reform for Acceleration and Inclusion Act. This revision of the tax code aims to make the system simple and fairer, and includes new revenue-raising measures that are designed to help fund the Government’s infrastructure program.
“Duterte has courted foreign investors, particularly in infrastructure, as part of a broader attempt to strategically rebalance the Philippines’ economy,” says Kurlantzick. “A lot of that investment has not come through yet, but they are clearly trying to woo more smart investment from China.”
Despite the outreach to foreign investors, prominent investors active in the Philippines caution that some restrictions remain. They highlight issues in government effectiveness; for example, some Build, Build, Build projects have faced bureaucratic and procedural obstacles.
There are also economic problems to deal with, including rising inflation, growing public debt and a trade deficit, with some commentators suggesting that the country needs to develop new industries to remain competitive internationally. There are also wide disparities in income and growth between the country’s different regions and socioeconomic classes.
Nevertheless, investors see the direction the country is heading as positive. For example, efforts to make it more straightforward to do business have garnered plaudits. The Ease of Doing Business Law was fast-tracked and is now on the statute book. It constitutes different types of application that commit the Government to act within 3, 7 or 20 days, depending on the complexity of the application. One feature of the law is that if these deadlines are not met, there is an escalation process that enables companies to report the issue to the appropriate government agency.