Saturday, November 01, 2008 [ manilatimes.net ]
South Korean investments were poised to flood into the Philippines—if only Manila could relax foreign-ownership restriction and bring down electricity cost—the newly arrived envoy from Seoul said Friday.
Ambassador Choi Joong Kyung of South Korea also said that practically all of the manufacturing giants in his country are looking to invest in the Philippines. But because electricity costs twice as high here as in South Korea and because of ownership restrictions, these companies are investing in other neighboring countries, such as Cambodia, Vietnam, India, Laos, Thailand and Indonesia.
Choi, who assumed his post only 40 days ago, spoke with senior editors and other staff of The Manila Times during a visit to its editorial offices on Friday.
“If you remove those obstacles, there would be a rush of Korean investments [to the Philippines],” he told The Times.
“The Philippines is actually the most strategic investment destination in terms of workforce, culture and geography, but [Korean] investors are being discouraged by the very expensive electricity cost and ownership restrictions,” Choi added.
Under the Philippine Constitution, foreign-owned companies are limited to 40-percent equity in order to give priority to Filipino-owned firms. Plus, foreigners are not allowed to buy property in the Philippines.
Also, the manufacturing sector consumes more energy compared with other industries. According to previous reports, electricity rates in the Philippines are among the highest in Asia.
Citing his discussion with Korean investors, Choi said that amid the global financial crisis, South Korean companies are in the “expansion mood.” He added, “They are actually investing all over Asia.”
Ohm Ki-sung, minister and consul general, said some of these companies include Samsung, LG and Hyundai, and other Korean companies in the manufacturing industry. He accompanied Choi during the visit to The Times.
“Hyundai is eyeing to put up a new car-manufacturing plant, which would cost at least $1 billion. Apparently, the Philippines is vying for this kind of investment,” Ohm said.
Development expert
Ambassador Choi—formerly deputy minister of Korea’s finance ministry and director at the World Bank headquarters in Washington, D.C.—said that apart from the country’s strong workforce, “big-ticket” investments may still go for the Philippines because of relatively cheaper labor cost, the presence of a highly skilled workforce and English proficiency.
According to data from the Philippine Board of Investments, South Korea is the second-biggest investor in the country, with investment pledges at P21.76 billion for the first half of the year.
South Korean was the fifth-largest source of foreign direct investments in the Philippines in 2007, an embassy official said. And in 2006, South Korea was number one, because of the multibillion- dollar investment of Hanjin Heavy Industries and Construction in Subic Bay Freeport.
Bilateral trade between the Philippine and South Korea stands at about $6 billion, and the envoy said that he would like to see that reach $10 billion.
Choi said there are about 20,000 overseas Filipino workers in his country, mainly working in factories. And about 100,000 South Koreans are living in the Philippines, including students, missionaries and expatriates.
Practically every aspect of Philippine-South Korean relations is growing, the ambassador said, adding that “the Philippines is [considered] among the top three neighbors” of his country.
The two countries will celebrate 60 years of diplomatic relations in March 2009, marked by friendship and friendly ties, the ambassador said. “Between you and me, [there are] no delicate issues. Just friendship.”
Next year’s anniversary is significant. Choi explained that in Oriental philosophy, the 60th birthday of a person is auspicious, because “they [philosophers] believe that the world changes every 60 years.”--Katrina Mennen A. Valdez
