The Philippines plans to open up its telecommunications sector to more foreign investors and an invitation by Philippine President Rodrigo Duterte is not just for Chinese companies, Philippine Socioeconomic Planning Secretary Ernesto Pernia said.
“The best offer would be picked from other offers as well,” Pernia on Saturday told reporters at a forum in Manila when asked if only Chinese companies would be considered by the Philippine government. “China is in the front line now, because no other country has sounded out or expressed interest to come in.”
Duterte, who has sought warmer ties with Beijing amid a territorial dispute between the two countries, last month offered China the right to operate in the Southeast Asian nation during bilateral talks with Chinese Premier Li Keqiang (李克強), Duterte’s spokesman Harry Roque said on Nov. 20.
Duterte’s commitment to open up the sector has prompted local companies, such as Philippine Telegraph and Telephone Corp, to start talks with China’s two biggest telecommunications providers to help challenge PLDT Inc and Globe Telecom Inc’s dominance.
The two became the Philippines’ only wireless carriers when the San Miguel Corp conglomerate sold its nascent wireless phone carrier to the companies for 70 billion pesos (US$1.4 billion).
The Philippine president’s order for government agencies to act swiftly to ease foreign investment limits is a first step toward opening up the telecommunications sector, Pernia said.
“There’s a lot of urgency to this,” he said, adding that better connectivity was a promise Duterte made during his election campaign.
Capital investment in the Philippines is surging past the rest of Southeast Asia as the government and firms ramp up spending.
In the first nine months of this year, net physical assets in the Philippines grew 10.4 percent from a year earlier. That compared with a 6.9 percent increase in Malaysia and 5.8 percent gain in Indonesia, data from the governments’ statistics offices showed.
There are reasons to remain bullish on the outlook. Philippine government spending jumped 28 percent in October, the largest rise in almost a year, with another record budget planned for next year.
Firms are also joining in: Metro Pacific Investments Corp plans to invest as much as US$16 billion through 2022 on road, water and power projects, while Ayala Land Inc is boosting capital spending to a record US$2 billion next year.
Duterte wants to transform the Philippines into an upper-middle income nation by the end of his term in 2022 and the cornerstone of his vision is a plan referred to as “Build, Build, Build.”
It includes the capital’s first subway and a 653km railway to the south.
“Capital formation goes hand-in-hand with the focus on infrastructure,” BDO Unibank Inc chief market strategist Jonathan Ravelas said.
“The private sector has always been investing, but now public spending is catching up,” he said.
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