MANILA, Philippines — The Philippines is capable of attracting $50 billion worth of foreign direct investments (FDIs) and generate three million jobs over the next decade, foreign businessmen said.
“As Arangkada starts its second decade, the Joint Foreign Chambers (JFC) is setting a new target for the next decade of $50 billion in foreign investments and three million new jobs for the Philippines,” American Chamber of Commerce of the Philippines Inc. president Peter Hayden said during the Arangkada Forum press conference.
When JFC launched its major advocacy Arangkada in 2010, Hayden said the group set a $10-billion target for additional FDIs and one million jobs, assuming reforms were carried out.
Targets set in 2010 have already been achieved and while the new targets are above the current annual FDI of $8.3 billion for the period 2015 to 2019, he said these could be met with the right policies for investments in place.
“We can achieve these targets but only with the support of our many partners in government and with the Philippine business groups,” he said.
He said the Philippines has enormous potential to attract investments and the recent passage by the Senate of the proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill, which seeks to reduce the corporate income tax rate and rationalize fiscal incentives, is seen as positive news as deliberations on such created uncertainty among the business community.
The group previously pushed for the grandfathering of incentives under the CREATE bill to ensure existing investors would continue to invest in the country and to show stability in policy for prospective investors.
American Chamber of Commerce of the Philippines advisor John Forbes said the Senate’s approved bill, which changed from the original proposal, is welcome because of the better transition period provided for firms.
“The main concern that has come out is on the level of review. The IPAs (investment promotion agencies) cannot approve [incentives for projects] over P1 billion. Our position had been $500 million
and that is going to be a work in progress as the FIRB (Fiscal Incentives Review Board) begins to function on these and they have the authority to raise that level,” he said.
Under the CREATE bill, the FIRB composed of Department of Finance, Department of Trade and Industry, Office of the President, Department of Budget Management and the National Economic and Development Authority, would approve incentives for projects with investments over P1 billion.
Hayden said sectors where the Philippines offers opportunities for investments is in business process outsourcing (BPO) as the local industry has shown resilience and continued to operate through work-from-home arrangements, even with the challenges posed by the pandemic.
European Chamber of Commerce of the Philippines president Nabil Francis said manufacturing is another sector which has the potential to grow in the Philippines.
Canadian Chamber of Commerce of the Philippines president Julian Payne said mining is also a sector where the Philippines can attract investments given its available mineral resources, but policies would be needed to show such activity can be environmentally and socially sustainable and regulated.
Other sectors offering opportunities for investments in the country are tourism, creative industries and infrastructure.
Australian – New Zealand Chamber of Commerce Philippines Inc. president Daniel Alexander said that as more companies, including those in the BPO sector, are working from home, reliable and affordable power supply would be necessary.
“Many BPO companies are working from home due to the pandemic and the power interruptions, brownouts and blackouts are having a significant impact on productivity when our people are working from home,” he said.
Aside from power, Hayden said increased investment would also be needed in access to internet and broadband technologies.
“On top of that, we also believe we need to continue to see investment in baseline infrastructure and that includes additionally investments not just in power generation which is a big strategic risk for the Philippines, but also everything from public transportation and ease of access to commute because we all know at some point in the future, we will return to offices in some form,” he said.
He said he is optimistic changes being undertaken in the country to address some issues affecting investors through increased number of cell towers, opening up the market to more technology providers and addressing the bureaucracy issues in deployment of infrastructure would continue.