Rising Philippines, Prosperous Britain – Aquino will meet Queen Elizabeth for Investments?

Queen Elizabeth wants to meet President Benigno Aquino in his June Kingdom Visit

President Aquino's official visit to the United Kingdom is expected to yield some "big-ticket" investments to the Philippines in energy and infrastructure, a Department of Foreign Affairs official said on Wednesday.

Foreign Assistant Secretary Elizabeth Buensuceso also said in a Palace media briefing that the President's trip from June 4 to 6 comes at a time when Europe is looking at Asia, particularly the Philippines, as a "safe haven" for investments.

"Expect big-ticket investments from the United Kingdom," Buensuceso said when asked about the potential investments to be generated by the trip, which will be the President's first official visit to Britain and Europe since he assumed office in 2010.

"Several business meetings have also been lined up for the President with top British investors, who have an interest in doing business in the Philippines and participate in the Aquino administration's Public-Private Partnership Program. As you know, the UK was one of the first countries to show support for the PPP," Buensuceso said.

She said the President is scheduled to meet with executives of various "big name companies" like Shell.

When asked, Buensuceso said the President's meeting with Shell would not involve possible investments in the West Philippine Sea (South China Sea) on energy exploration.

She said several Cabinet members and Filipino businessmen were joining the President's trip "to look into enhancing reciprocal investment, trade and tourism opportunities between the Philippines and the United Kingdom."

Buensuceso said some of the Filipino businessmen with the President are from the banking sector.

The trip—whose theme is "Rising Philippines, Prosperous Britain: Forcing a new era of mutual prosperity and partnership" seeks to "expand opportunities for closer economic cooperation" between the two countries.

It also seeks to "build up cooperation toward global peace, conflict-resolution and combating international crime; deepen people-to-people linkages from the grassroots to the highest levels of the government; and celebrate shared values of democracy, free speech, good governance, transparency and countercorruption."

Asked about the timing of the President's trip, Buensuceso said it will be a "historic moment" since "European countries and, in this instance, under the leadership of the United Kingdom are now looking for alternative places; safe havens."

There is a crisis going on in Europe, and now it is looking at Asia, Buensuceso said, noting that while in the past, Europe's reference to Asia was often limited to China, India and Singapore, "this time, the focus is on the Philippines."

"So we are gaining recognition and with this visit, I think…the Philippines will be in the radar of European investors," she said.

Buensuceso said British investors are apprised of developments in the Philippine economy, and that the UK and the Philippines are members of the Open Government Partnership Program.

"The UK is now vice chairman of the steering committee. So these things are a confluence of factors that make the UK, in this specific instance, look back, look again at the Philippines as a possible partner," she said.

Buensuceso said the assumption of the British coalition government led by Prime Minister David Cameron in May 2010 "reinvigorated the bilateral relationship between the Philippines and the United Kingdom, especially as the latter sought to re-engage emerging powers, including the Philippines."

"This unprecedented focus on deepening Philippine-British bilateral ties, especially in economic and political/security matters, has even led the British government to describe the Philippines as an 'emerging power in East Asia,'" she said.

Asked why the UK was chosen among other countries as the host of the President's first trip to Europe, Buensuceso said, "The biggest attraction here really is the potential of the UK as a very important political and economic partner of the Philippines." Buensuceso said the President will meet with Cameron at 10 Downing Street to discuss bilateral political and economic cooperation, the Britain's participation in the International Contact Group (ICG), regional and international issues, and anti-corruption and good governance practices in their respective countries.

Asked about the planned discussion on political and security matters between the two leaders, Buensuceso said the President will brief Cameron on the peace process in the Philippines, and will thank Britain for its important contribution as a member of the ICG.

"We are also going to announce the entry into force of the Mutual Legal Assistance treaty between the Philippines and the UK, which has just been concurred by the Senate after ratification by the President. So this is a very good development," she said.

Mr. Aquino will attend a luncheon feted by Queen Elizabeth, where she will be represented the Lord of Mayor of London Alderman David Wooton, a recent Manila visitor, and where several business agreements are expected to be signed, Buensuceso said.

He will also meet with the Duke of York Prince Andrew, as the official representative of the queen, who will be celebrating her Diamond Jubilee on that day.

The President will meet with representatives of the 250,000-strong Filipino community in Britain, which will also feature the "It's More Fun in the Philippines" tourism campaign of the government.

Buensuceso said the President's message to the Filipino community in Britain is that "we care for them; they are important in our economic and political development and that the Filipino government, the Philippine government is giving high priority to improve their welfare and to help them in times of need."

Asked whether the President would ride one of the public buses bearing the Philippine tourism campaign poster in London, Buensuceso said, "We will see if that is logistically possible."

She said during the President's visit, the Daily Telegraph will run a special feature focusing on his programs and on the President himself. The BBC will also have an interview with the Chief Executive.

From London Mr. Aquino will head for the United States for an official visit to Washington, where he will meet with US President Barack Obama, and Los Angeles from June 6 - 8 2012.

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2012 Philippines economic growth level up at 6.4 percent in Quarter 1

 It's more fun in the Philippines; it's more fun to invest in the Philippines.

In spite of shaky economy in the US and in Europe; Philippines  economic jump shows it's more fun to invest the Philippines.

The Philippine economy grew a faster-than-expected 6.4 percent in the first three months of the year, boosted by increased government spending.

The National Economic and Development Authority says the pickup from a sluggish 3.7 percent growth in 2011 also shows renewed business confidence in the Philippines.

The growth was fueled by a surge in public construction as the government splashed out on new roads and airports.

The government late last year announced a 72 billion peso ($1.66 billion) stimulus package to cushion the economy from Europe's debt crisis.

The services sector, which accounts for more than half of the economy, was supported by a rise in real estate and tourist arrivals.

The government expects full year growth of 5-6 percent.

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Philippine infrastructure planners have dreamt for years of building an elevated highway above the traffic-clogged streets of metropolitan Manila and linking the capital with the fast-growing cities and ports to the north and south.

Benigno "Noynoy" Aquino, the president, last week approved not one but two toll road projects across the city and instructed ministers to speed up the tendering process so they could be completed by the time he steps down from office in four years. He was hoping, he joked, for an easier journey to the beach.

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The proposed toll road projects, together worth 48bn pesos ($1.1bn), are adding to growing business optimism about the Philippines' medium-term prospects. Analysts say the country is on the cusp of its first investment boom since the Asian financial crisis of 1997, after more than a decade of political instability.

Many of the country's biggest conglomerates are rolling out their most ambitious spending plans in years to build shopping malls, office towers and residential projects.

The president is inviting private companies to build infrastructure projects, such as airports and light rail systems, through public-private partnerships that bind the government to help ensure investors recover costs and earn minimum returns through user charges or direct government payments.

Ramon del Rosario Jr, chairman of the Makati Business Club, a grouping of the country's biggest companies, believes foreign investors are also expressing confidence in the Aquino administration's efforts to tackle corruption.

"The main thing that has changed is this idea that we are now serious about good governance, about integrity in government, about fighting corruption," he said in a television interview, shortly after the Senate voted to remove the chief justice of the Supreme Court for failing to declare US dollar deposits in his asset disclosure statements.

Shares in listed companies betting big on infrastructure, including San Miguel and Metro Pacific – the two proponents of the highway project – have surged since late last year, making the Philippines one of the best performing equities markets in the world. Despite market volatility triggered by the risk of a Greek exit from the EUROZONE, the Philippine Stock Exchange index is up 14.8 percent this year after hitting record highs 19 times in the first five months of 2012.

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The Philippines is announcing first-quarter gross domestic product results on Thursday, and analysts predict that economic growth year-on-year may have accelerated to 4.6 per cent from 3.7 per cent in the fourth quarter, according to a Reuters poll.

Most economic forecasters say the Philippines will expand 5 per cent or more next year, giving the country a fighting chance of hitting the government's growth target of 7-8 per cent in 2016.

In the short term, however, the country's economic prospects are more subdued amid continuing sluggishness in the US and Europe, and a slowdown in China.

Exports, which are equivalent to about a third of the economy, fell 1.2 per cent from a year ago in March as deliveries to East Asia dropped sharply.

Some of the country's exports to China, such as bananas and other fruits, have been affected by the dispute between the two countries over the Scarborough Shoal reef in the South China Sea. However, Philippine trade officials do not expect the diplomatic dispute to affect deliveries of electronics parts and minerals, which Chinese companies need to produce other goods.

Mr Aquino also faces the challenge of improving regulatory capacity across government agencies and units, and resolving policy conflicts that are slowing down the approvals for large investments, say business leaders.

A case in point is plans by the Philippine unit of Xstrata' to spend up to $5.9bn in the next five years to develop one of the world's largest untapped mining deposits in the southern Philippines. The project is potentially the country's single-biggest inward foreign investment but is being stalled by a local government ban on open-pit mining.

Milagros Reyes, who heads PetroEnergy Resources, an exploration group, complains that investors often get caught between different government agencies with overlapping mandates. "We bring in foreign drill ships that are leased per day only to be told to wait for days for permits by maritime authorities" seeking to protect the domestic shipping industry, she said.

More Fun! Incredible Economic Jump of the Philippines in Q1 2012

Incredible! Amazing! While other Asian countries describe themselves with superlatives, the Philippines national ad campaign promises only "more fun."

Filipinos have reasons to smile. Asia's perennial underachiever is outperforming. This week saw more successes: Moody's upped its outlook on the country's credit rating to "positive," citing prudent fiscal management. An anti-graft drive notched a win with a guilty verdict in the impeachment trial of a former chief justice. And first-quarter gross domestic product growth of 6.4%, announced Thursday, defied most forecasts as well as the mood in the global economy.

But to build on the promise, the Philippines must deliver on three main growth drivers.

Business-process outsourcing is already booming due to strong English skills, cheap rent and low wages. A fondness for basketball and Hollywood movies is an advantage, too, when it comes to staffing call centers with workers who can make a cultural connection with U.S. customers. Starting from scratch a decade ago, the sector generated revenue of $11.25 billion last year. CLSA says that could double by 2015.

Government officials say tourism is a low-hanging fruit. They aim to triple arrivals to 10 million by 2016. A $5 billion gambling hub under construction will help. So too a surge in new planned hotel rooms and a rising tide of Chinese visitors, whose numbers were up almost 30% last year.

Arrivals hit a record high 1.2 million in the first quarter. But there are challenges. A regional economic slowdown would hurt. Manila's spat with China over potentially resource-rich areas of the South China Sea has raised diplomatic tensions that could stymie Chinese tourism too.

Poor infrastructure is a bigger issue. Security concerns at the country's airports have led to restrictions on its carriers. International aviation regulators won't let the nation's major airlines fly new routes to South Korea or the U.S.—their top two markets for visitors—until domestic airports improve.

Indeed, infrastructure spending is the third leg of the country's growth agenda. The government has pledged an extensive public-works program. The first quarter saw public construction jump 62% over last year. That pace must be sustained. Private investment activity also needs to pick up. RBS says weak private investment was a factor in disappointing first quarter construction overall, which was up just 0.3% from a year earlier.

Manila is more fun these days. But the Philippines must get serious on infrastructure to make the most of its time in the sun.

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