Philippines

Davide Gugliuzza published in Philippines, Politics and strategy

Philippines presidential elections: here are the candidates

In Manila people wonder what the post-Rodrigo Duterte will be like. There are many candidates who have chosen to compete for the highest office of the State, the Presidency of the Republic.

Rodrigo Duterte cannot run for president again and has renounced to run for vice-presidency. The Philippine Constitution provides for a single six-year term for the President who is elected in a single turn, regardless of the difference in votes with rivals.

The top candidates for the 2022 Philippine presidential election are Panfilo Lacson, senator and former police chief, Ferdinand Marcos Jr, son of dictator Marcos, Manny Pacquiao, a senator and former boxer, Ronald dela Rosa, the former police chief who leads Duterte's war on drugs, and Leni Robredo, the current Vice President. For now, the candidates do not include Sara Duterte-Carpio, the president's daughter. However, as a candidate for a third term as mayor of Davao, where her father was, she has until November 15 to change her mind and run for president. This same escamotage was used by his father in 2016.

To date, no one seems sharply favored to become the future tenant of Malacañang Palace, the presidential domicile. The race is about to begin: the electoral campaign will officially begin on February 8th 2022 ending on May 7 and the polls will be open on May 9.

Regarding the various competitors, some have elements of continuity and others of discontinuity with the outgoing administration.

Ferdinand "Bongbong" Marcos Jr, 64, would like to lead the country out of the pandemic crisis by seeking the collaboration of other political groups. This intention seems difficult to accomplish as human rights activists, mindful of his father's past, hope he will not become president. Protests in the street demand that Marcos return the wealth accumulated during the dictatorship (estimated at more than 10 billion dollars) and that they pay a prison sentence. In addition to the funds, another important asset of Marcos Jr. is the link with Duterte: the electoral base of the President in the south together with that of the Marcos in the north has the potential to gather a large and widespread number of votes in the country. It competes under the Partido Federal Ng Pilipinas, founded in 2018 in support of Duterte.

Senator Ronald "Bato” dela Rosa, 59, is the closest to Duterte's policy, who put him at the head of the controversial war on drugs that since 2016 has resulted in more than 6100 casualties. His candidacy in extremis wanted by the PDP-Laban, the ruling party of which Duterte is also a member, has the declared purpose of keeping on with the legacy of the current administration.

Manny Pacquiao and Francisco "Isko Moreno" Domagoso follow a different line. Both share a past of extreme poverty and a present of economic redemption, as well as fame.

Pacquiao, 42 and proudly Christian, has been a senator since 2016 and his agenda includes helping the poor. He criticized the disparity with which Duterte distributed economic and health aid to cope with the pandemic. According to the journalist Maria Ressa, Pacquiao would be politically immature for lack of experience and for having been mostly absent and not very proactive in parliamentary sessions. He participates under the banner of PROMDI, based in Cebu, and not of the PDP-Laban of which he has been president since December 2020. According to Rappler, Pacquiao chose to run with this party after the clash with the Cusi faction of the PDP-Laban who contested the legitimacy of this change after the official candidacy. This has made the Electoral Commission investigate the illegitimacy of the candidacy and conflict of interest.

Domagoso, the on the rise forty-six-year-old mayor of Manila, is a well-known actor of the 90s who has been in politics since '98. He is considered a populist like Duterte but more moderate, he says he intends to be a “healing president” and wants to continue the fight against drugs but without allowing "legal murders". He competes with Aksyon Demokratiko, a party established in 1998.

Panfilo Lacson,74, a long-time senator and former police chief, also ran in 2004. Probably at the last stride of his political life, he declared the will to combat corruption, drug trafficking and crime by running with the Partido Reporma.

Finally, Leni Robredo,56, is the candidate most at odds with the current presidency. The Vice President is a human rights lawyer who has always been critical of Duterte's campaigns. In the Philippine system, the vice-presidency is voted separately and can be on the opposite side to that of the President. Robredo says she has applied to "ensure a future of equal opportunities" for Filipinos. His electoral base is very large thanks to the work during her mandate, and she is an independent candidate despite being leader of the Liberal Party.

Last September, a study by Pulse Asia analyzed the chances of winning and the factors that determine the voting projections for each candidate. To have a good chance of winning is fundamental to possessing large funds and a widespread national organization that provides visibility. Marcos owns the family wealth but does not have an organization behind him; Lacson, Moreno and Robredo do not possess any of these requirements but rely mainly on their image and fame; dela Rosa is backed by the PDP-Laban but his sudden and last-minute candidacy can be a malus. Who could have great chances, if she were to apply, is Sara Duterte-Carpio. Her father's economic resources and alliances could give her an important advantage to obtain the necessary votes to take office in Malacañang Palace. But the game is still on.

0 Share
Emilia Leban published in Economy and trade, Philippines

The Philippines, Far East of Far West?

By easing the strict rules in foreign direct investments, the Philippine market opens up to foreign investors

The Philippines represents a very special case in the ASEAN landscape. The archipelago, located in the center of the China Sea, is geographically referred to as "part of the Far East". However, due to its history and origins, it would be more appropriate to call it the "Far West". In fact, the Philippines, in addition to being one of the strongholds against Chinese expansionism in the area and one of the barrier bases set by the US in the Pacific, continue to be one of the most important pawns of Western economic policy in Southeast Asia. 

The dichotomy between East and West is also reflected in domestic politics. In recent years, President Rodrigo Duterte has tried to open up the domestic market more and more to Western companies, pushing for a relaxation of the strict rules on foreign direct investment, considered by the OECD, in a 2019 report, among the most restrictive of their kind in all of Southeast Asia.

The obstacles to foreign investment in the archipelago have created, indeed, a market dominated in various sectors by large local conglomerates. That is why the Philippine Senate is now ready to adopt, by the end of May, a legislation amending three laws - the Foreign Investment Law, the Retail Trade Liberalization Law and the Public Services Law - approved by the House of Representatives last year.

Currently, under its Constitution and the laws in place, the Philippines remain a country with a number of restrictions on foreign investments, in addition to a series of restrictions on other areas, such as private property or employment. Depending on the business sector, the restrictions on foreign investments can be very severe, in particular for companies with share capital of less than 200,000 USD. Furthermore, for some professions, the exercise of them by a foreigner is prohibited or is made very difficult. A foreigner or a company with foreign capital cannot own more than 40% of a land. The share of corporations that can be held by foreigners generally ranges from 0% to 40%, depending on the sector in question, with some exceptions if the investment exceeds certain thresholds. Full private ownership is allowed to foreigners only in retail, but heavy restrictions are imposed on paid-up capital and investments, discouraging entry. Foreign companies usually enter the Philippine market through joint ventures with local partners or franchise chains, but system’s inefficiencies often emerge due to the lack of management control and the greater protection usually enjoyed by local competitors, further discouraging the foreign intervention. 

Not surprisingly, according to the Central Bank of the Philippines, net foreign direct investment in the country fell to $ 6.5 billion in 2020, marking the third consecutive year of decline. To counter the trend, in June 2020, the Philippine government announced the approval of 12 new economic zones, which will be managed by the Philippine Economic Zones Authority,, the largest investment agency in the country which has the task of assisting foreign investors and facilitate their business operations in the country, with the power to grant tax and non-tax incentives. However, under the Corporate Recovery and Tax Incentives for Enterprises Act (CREAT), considered the largest fiscal stimulus program in the country's history, the government will immediately reduce the corporate income tax rate from 30% to 25% and the incentives (such as tax breaks, logistical support and facilitated customs procedures) will be decided by the President on the advice of the Fiscal Incentives Review Board (FIRB). Opening the Philippine market to foreign investors and reducing bureaucratic constraints related to business are therefore among the top priorities of the Duterte government. A goal that now appears close, after the failed attempts of the previous administrations and that will move the axis of the Philippines even more towards the West.

0 Share
Redazione published in Asean, Economy and trade, Philippines

L’outsourcing nelle Filippine

Come le Filippine sono diventate un hub del BPO

Il Business Process Outsourcing (BPO) è uno dei settori in più rapida crescita nelle Filippine, al punto da rappresentare uno dei tre pilastri dell’economia del paese, insieme alle rimesse inviate dai lavoratori filippini all’estero ed al turismo.

La crescita del BPO nelle Filippine ha mostrato infatti un tasso di espansione medio annuo del 20% nel corso dello scorso decennio. Secondo i dati dell’Oxford Business Group, il settore rappresentava solo lo 0,075% del PIL nel 2000, dato cresciuto progressivamente fino a raggiungere il 12% nel 2019.

Secondo gli ultimi dati del governo filippino l’industria del BPO impiega 1,35 milioni di lavoratori, la maggior parte dei quali (87,6%) nei call center, mentre quasi il 12% lavora in aziende di computer e servizi informatici. Nell’ultimo anno, è emerso un forte trend di crescita anche del segmento del Data Analytics.

La Roadmap 2016-2022 della IT and Business Process Association of the Philippines (IBPAP) si pone tuttavia obiettivi di crescita ancora maggiori per il settore, puntando a toccare – entro un paio di anni – 1,8 milioni di persone occupate, 40 miliardi di dollari di fatturato complessivo e una quota del 15% nel mercato globale del BPO.

Il settore BPO è fortemente internazionalizzato nelle Filippine: il 55% delle aziende opera a livello globale (il 65% delle quali esporta verso gli Stati Uniti), il 27% a livello regionale e solo il 18% all’interno del Paese. Sono tre le ragioni principali per cui le Filippine sono riuscite a diventare un hub internazionale del BPO.

In primo luogo, il governo filippino si è attivato fin dai primi anni 2000 per incentivare gli investitori ad esternalizzare nel Paese. Ha infatti messo in atto diverse politiche liberali, inclusi benefici fiscali e misure di semplificazione nelle procedure in materia di occupazione.

Il secondo aspetto riguarda il bilinguismo. Oltre al filippino, gli studenti imparano fin da subito l’American English. La padronanza della lingua inglese e l’affinità con la cultura occidentale conferiscono alle Filippine un vantaggio concorrenziale rispetto ai suoi diretti competitors nel BPO, come l’India.

Infine, il salario medio dei lavoratori filippini nel settore è meno della metà di quello delle loro controparti nei paesi occidentali. Gli Stati Uniti ed altre imprese anglofone sfruttano questo fattore per abbassare i loro costi fissi.

Nonostante la crisi legata al COVID-19 abbia avuto un impatto negativo e rallentato la crescita del BPO nelle Filippine, le multinazionali straniere non hanno abbandonato il paese. Se la crisi continuerà a favorire la domanda di servizi telematici è infatti probabile che il settore riprenda presto la propria traiettoria positiva di crescita.

Articolo a cura di Amiel Masarap e Maria Viola.

0 Share