The gathering had the air of a post-mortem. About 100 executives and government officials listened quietly as Guillermo Luz poked holes in the Philippines' fairytale economic revival.
Luz, head of the Philippines' National Competitiveness Council, projected a deck of slides onto two pull-down screens that showed the fast-growing Philippine economy slipping in the World's Bank's "Ease of Doing Business" index to 138 out of 185 countries, near Tajikistan and Sudan.
"It's a lousy neighbourhood," he said of the two-notch fall this year. "I do not want to live with that ranking."
As the Philippines gallops ahead with the strongest economic growth in Southeast Asia and one of the world's best-performing stock markets, its shortcomings are being laid bare, including stubborn problems that have already started to undermine its economic renaissance.
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While foreign funds have poured into Philippine assets this year, driving the main stock index up around 30 percent to a succession of record highs and lifting the peso currency about 7 percent, foreign direct investment (FDI) remains embarrassingly low.
Total FDI is on course to hit around $1.5 billion this year -- about half its level in 2007 and less than the average $1.7 billion received every month in remittances from Filipinos overseas.
That is only about 3 percent of the total that flowed last year to a group of five peer economies including the Philippines in the 10-member Association of Southeast Asian Nations (ASEAN).
In his presentation in Manila's Makati business district, Luz highlighted the Philippines' lowly ranking in a range of categories, from "paying taxes" (143rd), to "starting a business" (161st) and "resolving insolvency" (165th).
Since coming to power in 2010, President Benigno Aquino has made headway against long-standing problems of corruption, shaky public finances and low infrastructure investment that earned the country the unwanted sobriquet of the "sick man" of Asia.
But he has yet to show his government can translate the torrent of hot money and improved market confidence that is also fuelling a property boom into real gains such as an expansion of higher-paying jobs and better transport links.
Calls by congressional leaders to loosen constitutional restrictions on foreign ownership have met with a lukewarm response from Aquino, a scion of an elite family whose mother, democracy icon Corazon Aquino, passed the 1987 constitution as president.
"I do not believe that foreigners would be that foolish to come here and put their money in business," Juan Ponce Enrile, the Senate president who is calling for the constitution to be revised, told Reuters. "They are at the mercy of local people who are not quite familiar to them. That is to me the reason why we lag in investment attractiveness in Asia."
'Salesman in Chief'
The absence of FDI is a missing link that raises doubts over how much has really changed in the nation of 96 million people, where many an investor has been stung by copious red tape, unpredictable policymaking and graft.
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Aquino has vowed to change the country's tarnished reputation among foreign investors, billing himself as the country's "salesman in chief". But to do so he needs to tackle vested business interests who benefit from a protected domestic market. So far, there are few signs he is doing so.
The constitution and current rules allow foreign investors to own no more than 40 percent in most industries and bars foreigners entirely in areas such as media and the practice of licensed professions such as engineering, law and medicine.
From 2000 to 2011, net FDI to the Philippines totalled $18.9 billion, according to United Nations Conference on Trade and Development, less than a third of what Singapore attracted in 2011 alone. As a proportion of the economy, the Philippines' net FDI stood at 0.6 percent last year, compared with 2.2 percent in Indonesia and 6.2 percent in Vietnam.
Strong foreign investment has been a vital ingredient in the rise of better-off Asian neighbours like Malaysia and Thailand, boosting job creation and deepening technological capabilities.
Foreign executives here are quick to complain there has been little concrete improvement on the ground, despite a surge of money into financial markets and credit rating upgrades on the back of improving fiscal health and lower borrowing costs.
"For me it's extremely frustrating," said Hubert D'Aboville, former head of the European Chamber of Commerce.
"We should welcome foreign investment, giving them the majority of 51 percent or 100 percent. What is important is to create jobs. We are not creating jobs."
Exodus of Workers
The Philippines has among the highest jobless rates in Southeast Asia at around 7 percent, helping to fuel an exodus of about 10 million Filipino workers in total that has yet to reverse course or even slow significantly.
Officials close to Aquino say he recognises the need to attract more foreign investment, but is wary of broaching a reform of the constitution that could open up a complex, messy and energy-sapping political process.
"I don't think it's going to be touched for now," Budget Secretary Florencio Abad, who is also vice president of Aquino's party and one of his close advisers, told Reuters.
"You create another uncertainty. Investments are coming in anyway, predominantly by local guys."
Combined investment by the public and private sector grew an annual 7.9 percent in the first nine months against just 1.1 percent a year earlier, with more than half made up of investments in machinery and equipment.
While policy transparency is widely seen as improving under Aquino, the Philippines' volatile political and legal systems regularly throw up unpleasant surprises for foreigners.
Aquino's government has halted new mining projects, stalling development of an estimated $850 billion in mineral reserves, until Congress approves a mining tax reform -- a vote that is unlikely to take place before May 2013 mid-term elections.
In October, Manila added to restrictions on ownership of real estate, lending firms and professions.
Meanwhile, the Securities and Exchange Commission is looking at expanding the 40 percent foreign ownership limit to apply to all classes of shares in a company, rather than just common or voting shares, following a Supreme Court ruling last year that telecoms firm PLDT had breached the cap.
"The Philippines will be shooting itself in the foot because it will severely restrict the available shares for foreigners," said Francis Ed Lim, managing partner of the Accra law firm and a former head of the stock exchange.
While service sectors such as call centres, retail and tourism are growing strongly, the manufacturing sector - an engine of development in countries like Vietnam and Thailand - struggles to compete with neighbours and attract investment.
Ford Motor announced in June it was closing its Philippine production factory, citing an inadequate supply network and a lack of economies of scale.
Foreign executives here tell a tale of two Philippines. One is the country's special export zones, where companies can set up wholly owned units easily and receive incentives and efficient services as long as they ship their output abroad.
Total investments by local and foreign firms in economic zones totaled nearly 660 billion pesos ($16 billion) by the end of 2011, more than doubling since Aquino took office in 2010.
The other Philippines is encountered when companies try to tap the domestic market, running a gauntlet of heavy bureaucracy, local government corruption and sometimes troublesome partnerships with Filipino firms.
Companies have to go through 16 separate procedures to start a business in the Philippines, compared with three in Singapore and nine in Indonesia, according to the World Bank report.
Japanese firms have rekindled their long-dormant interest in the Philippines this year, prompted by rising wages in China and Beijing's territorial dispute with Japan. Still, a potential flood of money has been slowed by ownership limits and other restrictions, said Takashi Ishigami, president of Japanese trading house Marubeni Corp in the Philippines.
Marubeni is teaming up with a local firm to bid for a $1 billion railway project, among at least eight major Public-Private Partnerships (PPPs) that make up Aquino's flagship plan to improve infrastructure.
But Ishigami said Marubeni was only supplying equipment as part of the bid, and had been deterred from taking an operational role by the government's refusal to guarantee rail fares. That shortcoming would likely deter Japanese firms from bidding for other PPPs, he said.
"The Filipino PPP is far away from our standard."