Date :March 30, 2008
Author: John Mangun
BUSINESS MIRROR
“Outside The Box”
Title: “Bad Journalism Bashes Philippines Business"
An article about the Philippines hit the internet last week with the completely misleading headline, “Survey: Philippines Viewed By Japanese As One Of The Riskiest Places For Business”. The copyright is by All Headline News from AHN Media Corp and is dated March 27, 2008. It is located at http://www.allheadlinenews.com/articles/7010455308.
The article, which incorrectly puts the Philippines in a negative light, talks about a survey, released last week by JETRO or the Japanese External Trade Organization.
My opinion is that either the author never properly read or perhaps misinterpreted the JETRO survey. I sincerely hope that this was not a deliberate attempt to discredit the Philippines.
The purpose of the survey is to profile more than 700 Japanese companies as to their business plans with the world. Five hundred of those companies have existing operations overseas, including 15 who have some sort of setup in the Philippines.
The second paragraph reads, “The survey of international operations of Japanese firms, 66.4 percent of those polled said they have plans to expand offshore operations, but the Philippines was their least choice among 18 countries”. This is false.
The implication is that there was a question that said, “Where do you want to do business?”, and the Philippines came in number 18. In fact, there was no question like that.
There were several questions asked about company expansion. In summary, it went like this: If you are expanding your Sales Operation, or Research and Development, or Distribution, or Regional Headquarters or Production overseas in the next 3 years, where are you going to locate?
Of course, the Philippines was near the bottom. China was the overwhelming favorite for sales expansion with its billion plus consumers as too with the US. China was favored as a regional HQ since China is Japan’s largest trading partner. China, Europe, and the US are the places to go for R&D facilities. The top five for production were China, Thailand, Vietnam, India, and the US.
No Japanese firm plans on setting up a primary R&D facility in the Philippines over the next three years. But they also have no similar plans to set up in Mexico, Brazil, or Eastern Europe.
Only one percent of surveyed companies intend to set up production plants in the Philippines. But this is a higher percentage than those that intend to build up these facilities in Hong Kong, Singapore, Canada, Mexico, or Russia.
The article falsely implies the Philippines is unfavorable a place to do business without putting the survey in any factual context. This is dishonest journalism at the most, and sloppy ‘news’ at the least.
The language itself is inflammatory and fraudulent. “The poll placed Manila the 15th best place to conduct primary research and development in, and, worst place to conduct new product development”. This survey never talked about “best” or “worse” nor did the question even speak of ‘favorable’ or ‘unfavorable’. It simply asked Japanese businesses “where firms are planning to expand through new investment or building up existing bases”. Yes, most are going to China. Yes, few are coming to the Philippines.
The survey results when these companies were asked to ‘rate’ each nation according to certain factors was most revealing.
The article says that the Philippines is “One Of The Riskiest Places For Business”. The survey asked about “Risks or issues in doing business” and separated ‘risk’ into eight categories: High forex risk, Inadequate Infrastructure, Lack of clustering or development of related industries, Underdeveloped legal system, Intellectual Property Rights, Rising labor Costs, Tax-related issues, and Labor Issues.
In six of those areas, guess which country was considered the riskiest? China. Vietnam was top risk in business development and the riskiest in inadequate infrastructure.
The Philippines never showed up as risky for labor costs or tax problems. In the other categories, the Philippines was the 5th riskiest out of five for forex, 3rd for infrastructure, 5th for legal, 3rd for business development, 4th for property rights and 5th for labor problems.
Based on all the eight risk factors, China is the most risky with 31 points, followed by India (24), Vietnam (23), Indonesia (16) and then the Philippines (11) and finally Thailand (8).
Perhaps to attempt to show journalist balance, the article concludes, “But there was some positive news for the Philippines as the firms gave plus points to the Philippines in the areas of little language barrier, second; fifth in full set of preferential measures and incentives; fifth in low business costs; and fifth in easy to access local information and services”.
It might have been nice if the article had compared this 2007 survey with the 2006 report. In one year, the Philippines lost its risk factor of “Political/social instability” and improved in all the other “Risk” factors.
The headline for AHN’s article should have read, “Survey: China Viewed By Japanese As The Riskiest Place For Business and They Still Want to Invest”. Or perhaps, “Survey: Japanese Think Philippines is Getting Better for Business”.
Email comments to mangun@email.com.
