PH stands out among booming markets

Goldman Sachs exec credits good governance

By Daxim L. Lucas
Philippine Daily Inquirer

11:06 pm | Wednesday, October 31st, 2012

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President Benigno Aquino. FILE PHOTO

The Philippines has strong growth prospects over the medium- to long-term due to a large degree to policies of the Aquino administration that have succeeded in leveling the playing field for foreign investors, a ranking official of Goldman Sachs said.

In a briefing late Tuesday, the investment banking giant’s vice chair, Carl Stern, pointed out that the country’s economic growth was poised to even surpass its peers in the so-called “Next 11” list of booming emerging markets published last year.

“Your growth prospects look quite good relative to the alternatives out there,” he told reporters during a one-day visit to Manila to meet the firm’s local clients. “The Philippines is certainly one of the fastest-growing economies.”

The Next 11 list was published by Goldman Sachs economist Jim O’Neill last year, citing Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea and Vietnam as the emerging market economies that would lead global growth in the 21st century.

O’Neill is the same economist who coined the term BRICs in 2003, representing the booming economies of Brazil, Russia, India and China.

“Among the Next 11, the growth forecast for the Philippines of 5, 6, 7 percent [gross domestic product growth] certainly ranks very favorably,” said Stern, who joined Goldman Sachs after serving as president and CEO of the Boston Consulting Group.

The visit of the high-ranking official of one of the biggest investment banks in the world represented an important milestone for the firm, which, until recently, has kept a relatively low profile in the Philippine financial market.

Stern said the growing emphasis on the Philippines was due, in part, to the economic difficulties being experienced by the advanced economies of the United States and western Europe.

“Investors go where there’s money to be made,” he said, referring to emerging markets in general and the Philippines in particular.

The Goldman Sachs vice chair acknowledged the fact that the Philippines has experienced several boom-and-bust cycles in the past, but expressed optimism that the current economic upswing being experienced was a unique event mainly because of the Aquino administration’s thrust at improving overall governance in the country.

“The job that your government has done in anti-corruption, among many things, is setting a more solid, predictable foundation for the kind of capitalism that we practice,” he said.

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BI promotes indefinite stay to foreign investors employing Filipinos

By Jerome Aning
Philippine Daily Inquirer

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MANILA, Philippines—The Bureau of Immigration has called on foreigners with businesses here to employ Filipino workers so they could avail of a visa that would enable them to stay indefinitely in the country.

Immigration Commissioner Ricardo David Jr. issued the appeal after the bureau resumed implementation of the special visa for employment generation (SVEG), which would grant indefinite stay privilege to foreigners with investments in business enterprises employing at least 10 Filipinos each.

Holders of the SVEG, also known as the job generation visa, also enjoy multiple entry privileges, thus they can enter and leave the country as they wish without the need to secure reentry or exit permits.

David said that the BI has been encouraging foreign businessmen to avail of the visa as it would generate employment opportunities for Filipinos.

The BI announced the resumption of the scheme two weeks ago when it released the revised implementing rules and regulations for the SVEG that were approved by Justice Secretary Leila de Lima.

The SVEG was first introduced in 2009 pursuant to Executive Order No. 758 but the bureau suspended the program last July pending revision of its rules to make it more responsive and relevant to the purpose of the law.

The visa is still subject to restrictions imposed by the Constitution and existing laws on foreign investments.

Lawyer Cris Villalobos, head of the BI-SVEG one-stop facility, said the new rules provided for the outright issuance of an indefinite visa to a qualified foreign applicant, instead of the initial probationary one-year visa provided in the old rules.

The Department of Labor and Employment (DoLE) shall certify that the visa applicant employs at least 10 Filipinos whose employment contracts shall also be submitted, according to Villalobos.

Under the new rules, household service workers are no longer to be counted in the 10 employees a foreigner has to hire in order to avail of an SVEG.

Instead of the office of the BI chief, a hearing officer will now process and act on the application within 15 days. The period to file an appeal of rejected application to the commissioner’s office was also shortened from 45 days to 15 days.

The BI also scrapped the old rule providing for the grant of a one-year probationary SVEG while the employer complies with the requirements.

The failure to comply with the requirement of hiring at least 10 Filipino workers remains a ground for the revocation of the SVEG. Under the old rule, the holder is given a year to comply with this requirement; the new rule shortened the period to just 30 days.

The new rules also lengthened the time for the annual reporting of SVEG holders from one month to two months.

The commissioner was also authorized to conduct periodic inspections to ensure compliance, to promulgate additional rules, and to create an oversight committee to monitor implementation of the rules.

The SVEG was introduced by the BI pursuant to Executive Order No. 758, in 2008, issued by then President Gloria Macapagal-Arroyo to attract more foreign investors and to create more job opportunities for Filipinos.

The SVEG holder is given multiple entry privileges and conditional extended stay, without need of prior departure from the Philippines. The same privileges can also be extended to the holder’s legal spouse and unmarried children below the age of 18.

SVEG applications may be filed at the BI main office or any of its field offices in the country. A P10,000 application fee, P1,000 BI clearance fee, P20 legal research fee, and P1,000 express lane fee shall be charged to each applicant.