- 3 letters of intent (LOIs) and memorandum of understanding (MOU) signed.
- Expected to bring $580 million worth of investments to the Philippines
- Sectors include medical equipment retail, dairy production, theme park development, and renewable energy
Dubai: The Philippines is now open for business — with foreigners now allowed to own up to 100% of companies in key industries.
And the easing of ownership restrictions in retail, telecom, airlines, airports, railways could open up fresh opportunities for businesses based in the UAE and the Gulf.
These were highlighted in a presentation made here by Philippine Trade Secretary Ramon Lopez, given the recent economic reforms undertaken by the Duterte government.
The Department of Trade and Industry (DTI) secretary is currently in Dubai promoting his country as a “premium” investment destination. Lopez made the pitch during the Country Business Briefing at Expo 2020 on Friday (February 11, 2022).
In his meeting with business executives in Dubai, Lopez said the Philippine government has been pushing to open up of the country’s economy. There are two “aces”, or developments cited by the government:
First, the amendments to the Retail Trade Liberalisation Act (RTLA) had been enacted into law. The passage of Republic Act 11595, which became a law on January 21, 2022, amended the RTLA of 2000.
The move is hoped to bring in the much-needed investments in the country’s retail trade, including supermarkets and consumer electronics — a moved hope to bring down the cost of consumer goods in more parts of the country.
Job creation outside Metro Manila is also being touted, as competition in the retail sector shifts and expands to the provinces. The amended law prioritising employment of Filipino nationals.
The new law encourages foreign retailers to keep a stock inventory of goods made in the Philippines.
The second legislative “ace”, according to Lopez, emerges from the amendments to Foreign Investments Act and Public Service Act (PSA), already passed by Congress and now awaiting President Rodrigo Duterte’s signature.
“Increased competition in the Philippine market is expected in terms of services and products which will generate better quality of and competitive pricing to the benefit of the consumers,” Lopez told UAE-based investors.
He added corporate income tax was reduced from 30 percent to 25 percent through the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law and it provides competitive tax perks to investors.
The DTI chief urged investors from the Emirates to look into investment opportunities in electronics, hyperscalers, automotive, copper, nickel, aerospace, and agribusiness, among others.
“While the pandemic remains to be very challenging, we are already seeing signs of recovery, with some indicators even already exceeding pre-pandemic 2019 levels,” Lopez said.
The Asian country is poised for sustained period of growth. It recorded a 7.7-% gross domestic product (GDP) growth in the fourth quarter of 2021 and a full-year growth of 5.6 percent, which is one of the highest economic expansions in Asean and East Asia.
While the UAE, Lopez witnessed the signing of three letters of intent (LOIs) and one memorandum of understanding (MOU) from Middle East investors.
These LOIs and MOU are seen to draw $580 million worth of investments to the Philippines in sectors of medical equipment retail, dairy production, theme park development, and renewable energy projects.
In his remarks at tje Expo, Lopez said: "The Expo 2020 Dubai has been a game-changer in the Philippines-UAE economic relations, opening unlimited opportunities in trade, tourism and investments.”
It also values reciprocity: It mandates the entry of foreign retailers coming from countries that do not prohibit the entry of Filipino retailers.
In the case of foreign retailers engaged in retail trade through more than one physical store, the minimum investment per store must be at least Php10 million “provided that this requirement shall not apply to foreign investors and foreign retailers who are legitimately engaged in retail trade and were not required to comply with the minimum investment per store at the time of the effectivity of this Act.”
The Department of Trade and Industry, Securities and Exchange Commission, and the National Economic and Development Authority shall review the required minimum paid-up capital every three years and their recommendations should be submitted to Congress.