President Aquino leads other Asian leaders in the opening plenary of the World Economic Forum on East Asia at the Shangri-La Hotel in Makati. Photo by Jonathan Cellona for ABS-CBNnews.com
MANILA, Philippines (UPDATE) - The Philippines has the potential to be the next "Asian miracle" but more has to be done to make growth inclusive and sustainable, business leaders said.
Kevin Lu, a distinguished fellow at INSEAD, said that while the Philippines is seeing positive momentum, there are risks and uncertainties in policies that have to be addressed.
He said policies should be further streamlined to attract more foreign investment.
"There is still a fairly strong sense from foreign investors that there is regulatory and policy uncertainty," Lu said at the first session of the World Economic Forum on East Asia on Thursday.
Karim Raslan, the chief executive of Malaysia's KRA Group, said some foreign investors see the Philippines as quite "tricksy."
"I have a lot of friends who are looking or who have bought assets here and generally they find the Filipino market it's quite 'tricksy'. More difficult than Indonesia, to be frank. That is something to be borne in mind. The size of the market is that much smaller, and if it's that more tricksy, then that's something to know," he said.
Raslan, who is also a newspaper columnist, admitted he changed his initial impression of President Aquino who he interviewed in 2010.
"I remember interviewing him in 2010 and there was a charisma deficit...But how impressive, the man has been in delivering. This is the point, this is a man I remember saying, 'We are going to do this. We are going to improve governance. We are going to increase tourism.' And in 2014, I remember listening to him in 2014 in Kuala Lumpur and by God, he has done it. Here is a man who has delivered and that impresses the market and investors and impesses the hell out of people like me. Very low key but done," he said.
However, he said more needs to be done in key sectors like infrastructure, education and healthcare.
He also highlighted the potential of tourism and how it can boost the country's economy if maximized.
"This is something that is still not sufficiently known outside the Philippines. The islands are beautiful, the waters are beautiful, you still need to push that more," he said.
'Change the rulebook'
Philippine Long Distance Telephone Co (PLDT) chairman Manny Pangilinan, meanwhile, said the current administration should also focus on "hard developments" to make growth inclusive.
He said government shouldn't rely on "perceptions" for growth to be inclusive and sustainable.
"Certainly the soft part of development is important, reforms, perceptions of the Philippines improving. But there are the hard parts of development as well. It can't all be perception... The main reason why inclusive growth is not as inclusive as it should because we're mainly a consumption-driven economy, and it's time to switch to an investment-driven economy," Pangilinan said.
He noted that deficiencies in infrastructure, agriculture, power and the rising inequality of income are deterrents to sustaining economic growth.
At the same time, Kaslan noted that the single term for the president may have contributed to the slow development.
"Democracy is a means, not the end. You have to get into the rulebook to change the rules. You have to use the political capital to do that to make things faster... Long-term vision is right, but it's tough when you only have one term. That's another case of the rulebook... You do need two terms, one term is not enough. Twelve years you can do long term," he said.
Under the Philippine Constitution, the President is only allowed one 6-year term. President Aquino's term ends in 2016.
Tourism Secretary Mon Jimenez also believes that the Philippines can be the next "miracle" in Asia, adding that this is a"perfectly explainable miracle."
"It's not a total and complete surprise for us who worked for the gains that you're see today and it started with the restoration of trust in leadership and is now in full gallop because the people have regained their trust in the future," he said.
Marife Zamora, Convergys Philippines chairperson, agreed, saying "where can you find a business that has grown into 55,000 (employees) in 10 years?"
"We cannot leave everything to government. The private sector also has to lend a hand," Zamora said.