Will the new government continue a resurgence of the Philippines as an Asian tiger? And what are the legal hurdles that challenge its rise? James Kelly reports
THE BUNNY BAKERY in Ortigas is not just another sugary sweet shop serving up kitsch cakes. Its baristas deftly etch, on request, the face of the new president of the Philippines, Rodrigo Duterte, in the foam of a cappuccino. Such artistry has earned the café’s owner, Zack Yongzon, the title of Vincent van Froth.
This entrepreneurial spirit captures a flavour of the optimism and creativity now percolating throughout the country following the election of the often foul-mouthed mayor of Davao as the republic’s new president. An app depicting a gun-toting Duterte slaying criminals has almost one million downloads.
On his inauguration, on June 30, Duterte inherited the reins of a country that has shaken off its former moniker as the basket case of Asia. Years of uninterrupted growth of 6%-plus, a young and well-educated English-speaking workforce that has helped the country become the call centre capital of the world, and the billions of dollars in remittances from its army of citizens working around the world is fuelling consumption and the emergence of a prosperous middle class.
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With improved infrastructure and the possibility of a peace settlement in Mindanao, the tourism sector is also expected to see an influx of new operators. “We see significant interest in the tourism sector, especially in the southern provinces renowned for their beaches,” says PJS Law (Puyat Jacinto & Santos) managing partner Regina Jacinto-Barrientos. “There are certain airports in the country that are being expanded or further developed or improved. Together, with the implementation of that infrastructure plan, comes the growth in tourism. Now we’ve got the [resort] brands coming in, not just Western brands but a lot of the Asian brands. It’s a lot to do with the ASEAN roll-out when travel will be freer within the ASEAN region.”
“The English proficiency of the young workforce and the service orientation of the Filipinos may be the top reasons for investors to decide to invest in the Philippines,” says Pearl Liu, a partner and head of corporate and commercial practice group at Quisumbing Torres. Foreign investment restrictions, high tax rates, poor infrastructure, excessive red tape, and security concerns are the most cited headaches, and each one is highlighted as a matter of priority by the new administration. The challenges are not new and reformist agendas have seen other contenders elected as president in the past. This time, though, there is a sense that things are different.
To return to the baking analogy, the final word belongs to one of the respected elders of the Philippines legal scene, SyCip’s Rocky Reyes. “We’ve been baking a cake with the same ingredients for a long time, now we are adding some chilli. People want something different.”