MANILA – After approving investment projects worth PHP5.2 trillion from 2016 to June 2021, the Department of Trade and Industry (DTI) is committed to support policies and push for programs that will attract more investments to the country.
“The DTI strongly supported the full implementation of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which is definitely a milestone and a new landmark incentive law. It provides the government the flexibility in granting fiscal and non-fiscal investments for high-value strategic investments,” DTI Secretary Ramon Lopez told the Philippine News Agency.
On March 26 this year, President Rodrigo Duterte signed into law the CREATE Act, which reduces the corporate income tax rate in the country from 30 percent to 25 percent for big corporations and up to 20 percent for small domestic businesses.
It also provides performance-based, time-bound, and targeted fiscal incentives packages for both local and foreign investors.
Lopez said the government is also pushing for legislative reforms that will attract more foreign investments such as the amendments to the Public Service Act, Retail Trade Liberalization Act, and the Foreign Investments Act.
He added Duterte certified these bills liberalizing the economy as urgent, and are targeted to be approved by October this year.
Improving market access
The DTI chief said the Philippine government under the Duterte administration is supporting trade liberalization and pursuing agreements with other countries to improve economic relations with other nations.
The Philippines is a signatory of the Regional Comprehensive Economic Partnership (RCEP) -- a trade agreement among Asean countries and its free trade deal partners including China, Japan, South Korea, Australia, and New Zealand.
RCEP was concluded in November last year.
This free trade agreement (FTA) among 15 countries in the Asia Pacific will enter into force 60 days after six Asean member states and at least three FTA partners submitted their instrument of ratification.
“For the Philippines, we are working hard to finish our internal processes so that the Philippines can be one of the first six Asean member states to deposit the instrument of ratification,” DTI Assistant Secretary Allan Gepty said in a previous interview.
Lopez said the signing of RCEP could help renew growth in foreign direct investments (FDI).
A United Nations Conference on Trade and Development report showed that the Philippines’ FDI inflows in 2020 rose 29 percent despite the coronavirus disease 2019 (Covid-19) pandemic, bucking the global trend of declining FDIs last year.
“For the Philippines, more specifically, RCEP presents an enhanced platform for attracting investments in export-oriented manufacturing,” he added.
As India was not able to sign the RCEP deal last year, the Philippines is pursuing a preferential trade agreement with the south Asian country.
The top trade official also initiated re-exploring the country’s opportunities in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), an FTA of 11 countries.
The Philippines wants to strengthen economic ties with four of the CPTPP member countries, which the country does not have a trade deal with, including Canada, Chile, Mexico, and Peru.
The country also hopes to secure a trade pact with the United States through the CPTPP when the US pursues its membership to the CPTPP.
Promotion amid pandemic
Lopez also highlighted DTI’s industrial strategy amid the new normal, the ReBUILD PH or Revitalizing Businesses, Investments, Livelihoods and Domestic Demand.
ReBUILD PH aims to revitalize demand and empower local industries to capture the demand in the agriculture, industry, and services sectors as the government injects economic stimulus to boost consumer confidence and keep local jobs.
“This is important to attract more production activities and create a better business environment for investments,” Lopez said.
The new industrial strategy also targets to enhance production capacities in the agriculture, industry, and services sector to help build the country’s export competitiveness and manage imports.
“This creates a virtuous cycle of sustained and growing economic activity with strong domestic linkages,” he added.
The DTI also launched last year the “Make It Happen in the Philippines” campaign for the country’s international investment promotions.
“By rebranding the country and proactively targeting investors, the Philippines raise awareness of the country’s competitive investment landscape, highlight business opportunities, and generate leads that will eventually pave the way for more FDIs for the Philippines,” Lopez said. “The brand takes inspiration from the genuine Filipino trait of resilience and ‘make it work mindset’, exuding strength and adaptability even in times of adversities.”
Upskilling the workforce
Lopez said the Filipino workers remain one of the country’s top factors in attracting FDIs, and the government, in partnership with different sectors, aims to further improve the quality of the local job market.
“At this point, the country holds immense potential to achieve breakthrough growth through greater productivity, higher savings rate, and increased creativity. Our workforce is currently at 45 million and we produce an average of 750,000 annually across a wide range of disciplines, including engineering and technology,” the DTI chief added.
For the past five years, DTI-attached investment promotion agencies -- the Board of Investments and the Philippine Economic Zone Authority -- approved PHP5.2 trillion worth of projects throughout the country.
These investments are expected to create 804,147 jobs for Filipinos. (PNA)
