Is PNoy confused?

"My experience covering the business beat for the past 42 years is that there has never been a single year in which foreign investments exceeded $3.5 billion. Not $4 billion. Not $5 billion. And certainly not the $7 billion or close to $8 billion that Aquino is claiming... Why the difference in figures? My guess is that the figures are not firm. Or President Aquino is confused which is which.”

Is PNoy Confused?

By Tony Lopez

In press statements and press interviews, President Aquino claimed that in his first six months, he got $7.8 billion in investment commitments—$2.4 billion from the United States and $5.4 billion from Japan. (Interview with Aurea Calica, December 23, Philippine Star).
The investments are supposed to create 43,000 jobs, which implies that it takes $181,395 (or almost P8 million) to create one job, a rather outlandish amount to generate a job. In the 1970s when I was covering the Board of Investments, P50,000 could create a job.

On November 12, 2010, Noynoy gave different figures in the report made by Chino Leyco of Manila Bulletin who reported the potential investments from three companies from Japan of $3.655 billion, which is higher than the $2.8-billion investments the President secured during his trip to the US in September. Add $2.8 billion and $3.655 billion and you get $6.455 billion—a difference of $1.35 billion from the PhilStar figure of $7.8 billion.

Why the difference in figures? My guess is that the figures are not firm. Or President Aquino is confused which is which.

My experience covering the business beat for the past 42 years is that there has never been a single year in which foreign investments exceeded $3.5 billion. Not $4 billion. Not $5 billion. And certainly not the $7 billion or close to $8 billion that Aquino is claiming.

Which is which—$6.45 billion or $7.8 billion? Either the investors are pulling President Aquino’s leg or he is simply lying. Having been trained by his mother, who didn’t lie, Noynoy, of course doesn’t lie.

In 2000, after two years under the presidency of Joseph Estrada, $3.225 billion in foreign investments came in, the best of his presidency. In 2007, more than six years into President Arroyo’s presidency, the $3.2 billion was exceeded by a $3.5 billion FDI—the best of her nine-year presidency.

Also in my experience covering business, foreign investors don’t usually decide to invest billions of dollars just because they shook the hand of the president. Ever heard of the phrase “due diligence”? Yes, investors do that, unless, of course, they are laundering money.

I dearly want President Aquino to attract outrageously large amounts of foreign investments. If it is true Noynoy can generate $3 billion in investments per trip, then by all means he should be traveling around the world. After 10 trips, he should be able to raise $30 billion, more than enough to bankroll the priority projects under the public-private partnership program of the president many times over. The total cost of the 13 PPP projects for 2011 is only $3.11 billion

Among about 200 countries, the Philippines is No. 144 in competitiveness (out of 183 countries surveyed by the International Finance Corp.). Our country is simply not competitive enough to attract investments.

In 2008, the Philippines attracted $1.52 billion in FDI—the smallest among the six major Asean countries. The same year, Singapore got $22.72 billion, Thailand $10 billion, Malaysia and Vietnam $8.05 billion each, and Indonesia $7.9 billion.

It takes 45 days to get a business permit and six months to start up a house construction. It is the pernicious permit system—you get a permit for nearly everything you want to do. Since you get a permit, you deal with government bureaucrats and each time you do that, you need to grease their hands or nothing happens.

Remember the Manila couple who were taking a stroll? They were arrested by a Manila policeman who brought them to the Manila Police headquarters. There, the woman was raped and robbed. That’s one atrociously pernicious effect of the permit system. Wala silang permit mamasyal. So they were charged with vagrancy. You know the legal definition of vagrancy? Walking aimlessly.

Indeed, millions of Filipinos are walking aimlessly—looking for a job. The Philippines has a labor force of 38 million. One fourth of them or 9.5 million are looking for a job (either because they don’t have a job, the unemployed, or are overqualified for their present job, the underemployed. They are jobless. Looking for a job. They are walking aimlessly. Rapists among our policemen will certainly have plenty of rape victims.

How much will it cost to employ 9.5 million jobless Filipinos who are now walking aimlessly? If you use Noynoy Aquino’s job generation figures and foreign investments, it is $1,723,252,500,000.00. That’s $1.7 trillion.

If Noynoy can indeed generate $3 billion investments per trip, he should travel 574 times over the next six years (that’s once every four days) to raise the $1.7 trillion.