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Wednesday, November 22, 2017 | MANILA, PHILIPPINES
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Date posted: Friday, December 11, 2015 | Manila, Philippines

From ‘Asia’s sick man’ to ‘Manila standard’: Repositioning Brand Philippines

A LOT has been written about the government’s “More Fun in the Philippines” campaign. Inasmuch as tourism promotion is only one pillar of a rebranding strategy, we saw it fit to focus on efforts to shed the country’s image as “Asia’s sick man.” Has a new image supplanted the ‘sick man’? Has this new image gained enough traction to provide a country-of-origin effect? BusinessWorld Research Head Arnold S. Tenorio sat down with Department of Trade and Industry (DTI) Secretary Gregory L. Domingo to discuss the country’s unique selling proposition. Here are excerpts of that one-on-one interview:

You’ve been selling the Philippines as an investment destination through investor road shows and trade delegations abroad. Tell us how investors have been responding to this effort.
We have been very well received. The interest level in the Philippines is very high. I can see that in the frequency of requests to give presentations. And when we give investment fora, the attendance levels are quite high compared to when we started. Let’s say in 2010-2011, when we undertake an investment forum in Taiwan, Japan and UK. In Taiwan, I’ve been going there every year. In 2011, we would gather crowds of only 20-40 business people. In the last year, we had about a little over 200 in attendance. In Japan, the crowds are always big. In 2010-2011, the crowds were 200-300. In the last one I gave, there were over 500. In that country where people are quite busy, that’s a very big crowd by any standard. In UK, it was the same. When we went there two years ago, crowds were huge. We had two sessions. The first one was attended by 200, the second one by 100. Others were shocked at the crowds that the Philippines draw because they also attend investment fora of other countries. So it’s a very good sign of the interest level. And you can see, many investments are coming in. So manufacturing has been growing close to 9% in 2013-2014. Average was 8.8%. We haven’t seen that kind of growth for a long time.

If you compare investor concerns raised when you started pitching the Philippines, as against those raised in your latest road show, how have they changed?
Many of the concerns they’ve raised we’ve already accomplished. The three are the relaxation of the Cabotage Law -- we’ve done that -- banking liberalization -- we’ve done that -- and Competition Law. Those are three big ones that were difficult to pass, but were passed. The Sin Tax Reform Law also was passed. This was a difficult one.

What concerns are investors raising nowadays?
Initially, port congestion was an issue, but that’s no longer an issue. Their biggest concern is chemicals, dangerous chemicals. It’s being raised as an issue because under the Dangerous Drugs Law, in 2012, which the Philippine National Police is implementing, all chemicals are subject to inspection. All industries, all manufacturers use chemicals. If you subject all to inspection, they’re having a difficult time because of delays in raw material imports.

Traffic is an issue now. But there’s going to be an improvement by end of next year and into 2017, because the Connector Road between North Luzon Expressway and South Luzon Expressway will be finished. That will offload trucks and buses from EDSA and main thoroughfares.

Second, the MRT-3 (Metro Rail Transit Line 3), which is operating at 50% capacity, from 90%-100%. A new set of trains will start coming in January. Every month, a new set will come in. We can return to full capacity. That will offload 300,000 passengers on EDSA back to the trains. So we can see a reduction in buses, cars from EDSA. Ordering trains takes three to four years. We ordered three to four years ago, so we’ve begun to receive these.

How would you craft the Philippines’ positioning in one phrase?
“Your business, our people.” That captures our strength. I made that. That’s DTI’s mantra for business. For the entire DTI, our mantra is “Enabling business, empowering consumers.” Within DTI’s business promotions side, our slogan is “Your business, our people.” So on CNN, our ad says: “Invest in the Philippines: Your business, our people.”

’Yung tao natin ang ating biggest asset. When you say competitiveness, it always means value-for-money. That’s the ratio: what is the value you’re getting for the money that you’re paying. And for the Philippines, the value-for-money for the Filipino worker is very high. That is why, Filipinos working overseas, being a big percentage of the population, is not a fluke. Filipinos are desired by employers all over the world because of that value-for-money. The value that they’re getting from paying Filipinos is very high compared to others.

We’re undertaking a big campaign until the APEC (Asia-Pacific Economic Cooperation) Leaders’ Summit. As we get closer to APEC, we’ll bombard CNN with ads about the Philippines. We opted for CNN because it has a wider coverage. It’s an image thing, so we need a broader audience.

Foreigners for the longest time had dubbed the Philippines the “sick man of Asia.” Textbook marketing says effective positioning requires using what image is already in the prospect’s head. Why did you not use “sick man of Asia” by turning it around for a brand campaign?
Because there’s an assumption there: that being a sick man is bad. You don’t start from a bad thing. Like, I used to be a criminal, now i want to be good. You don’t say that. I used to be good, I wasn’t the best, but I wanna be the best -- now that’s different.

We’re now dubbed one of the bright spots in Asia. Because even with the global slowdown, we’re still going to exhibit close to 6% growth this year. Surprise here was the weakness of China in importing goods, which affected the exports of everybody. So in ASEAN (Association of Southeast Asian Nations), only Vietnam will grow. A lot of investors are moving out of China because of rising costs. In 2009, labor cost in China was slightly more expensive than in the Philippines. By 2014, it was double that of the Philippines.

How is the market responding to the Philippines’ pitch?
It’s widely accepted. It should be the tag line has to have traction. You cannot claim a strength that people perceive as untrue -- it’s called confirmation bias. If you claim something that is obviously incorrect, it doesn’t have traction, you waste your statement. So you need to capture the essence of what is your strongest, then put it in a slogan. And that’s really what we are. Our biggest strength is our people -- we are very good workers.

How are other ASEAN governments responding to the Philippine pitch?
Many of them are pushing for their people, but you can really see the difference of Filipinos. First of all, we’re English-speaking, which is a very big advantage. Second, we’re exposed internationally because of the OFWs (overseas Filipino workers), balikbayans, IT-BPO (information technology-business process outsourcing). In all of these, our people are exposed to international best-practice. We went through many cultures -- Spanish, Americans -- so we’re more internationalized.

How about Philippine corporations?
If you notice in the CNN ads, there are CEO (chief executive officer) testimonials and they talk about our people. And when I meet foreign CEOs, they always talk about our people. They have a high regard for our people. For example, Convergys has a “Manila standard.” That’s their global standard. Their benchmark for global operations is what they call “Manila standard.” It’s not just Convergys, but many other firms doing the same thing. Maybe not for their entire operations, but for pockets of their operations, their benchmark is the Manila operation.

How are you future-proofing the gains made in rebranding the Philippines?
Many of the gains were institutionalized in terms of the programs put in place. For example, in the efforts for the industry road map. From the start, DTI has taken the view that industry knows better than the government on what needs to be done. We’ve always taken that view. So when we started this road map effort, it was in close collaboration with industry. We just pushed them, but they were primarily responsible for developing the road maps. We just provided guidance and data if necessary, as well as tips on how to do it to make them consistent in form and structure. But the strategic plan -- how to integrate, how to go upstream or downstream -- it all came from them. And the benefit of the road map is not the road map itself. It’s really the process. The process is more important than the final output of the road map. Because by the time you put down on paper the road map, the industry has internalized it. The mere fact that they went on a serious development of a road map means they thought a lot about the issues; and the clarity of thought is what brings great progress.

Leadership makes a lot of difference in making the country move forward. Since we don’t know how the leadership will come out until after the elections, many of the reforms are institutionalized either in terms of law, of government regulations, of attitude of people. The best protection in terms of keeping the gains is really to educate the people. Because the better educated our people are, the more politically mature they become, the more demanding they are of public servants, the more aware they are of what’s going on and what’s being done. To a large extent, the availability of Internet has helped out. It has modified the way our politicians behave. Because of the blog sites, feedback is instant. If you do something wrong, the population knows immediately. So this type of environment ensures that a lot of the popular reforms will be difficult to reverse. The other thing is you also have good fiscalizers. I expect even President [Benigno S. C.] Aquino [III], after he steps down, I don’t think he will be idle, especially if some of the major reforms are reversed. And since a lot of people listen to him, it won’t be easy to reverse many of the things he has done. A change in leadership can always result in a change in… the business environment. Even in the US. So leadership makes a difference.

*Send e-mail to Mr. Tenorio at astenorio@bworldonline.com or follow him on Twitter @arnoldtenorio.

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