US, Europe investors bullish on PH

EUROPEAN and American investors remain highly optimistic of the country’s trade and investment prospects as many of them have expressed strong interest to either set up operations in the Philippines or expand their existing businesses here.

The bullish sentiment was relayed to high-ranking Philippine government officials during a roadshow late last month to the United States, France and United Kingdom, where the local delegation sought to showcase to investors the country’s infrastructure, IT-business process outsourcing (IT-BPO), information and communications technology (ICT), aerospace, services as well as the maintenance, repair and overhaul (MRO) industries, among others.

Fresh from his trip to these countries, Trade Secretary Gregory L. Domingo disclosed that in the US alone, two big construction firms were considering to set up operations in the Philippines to take advantage of the Quadruple-A license being dangled by the government to foreign investors.

This new license category (“AAAA”) would effectively enable foreign companies to secure construction permits as regular contractors and participate in local projects with 100-percent equity or with full ownership.

“They will set up operations not necessarily just for the Philippines but hopefully to serve as an Asean base for their construction activities in the region because we will now allow 100-percent foreign ownership,” Domingo added.

Another area that the Department of Trade and Industry would want to tap was Internet-based service.

“One big opportunity we’re seeing now—and it’s possible that we’ll see a few companies break out in the next three to five years—is the Internet-based services that include e-commerce and apps, among others. When you go to Silicon Valley, you will see that the world is going to change in terms of the way we do things. We need to participate in a bigger way in this space,” Domingo explained.

“And I’m hopeful because of many things. One is that some of the big players here see the opportunity in that space and they’re starting to invest. We need the ecosystem to make that happen. Second, we have the IT-BPO sector with over a million directly employed. And many of those are in fields related to this space. These are people who deal with e-commerce, software development, networks and many of them are foreign trained by global companies. So right now we’re building our capability as a nation to have this cadre of young, capable people who will be part of the ingredients that will make this possible,” Domingo added.

In Europe, Domingo was able to meet with his counterparts, namely French Trade and Tourism Minister Matthias Fekl and Lord Francis Maude of Horsham, the minister of state for trade and investment for the UK, with whom he emphasized the country’s inclusion in the European Union’s new generalized scheme of preferences (GSP+).

Domingo said that the Philippines and France were looking to revive the conduct of the Joint Economic Commission (JEC) with the first meeting targeted within the year. The plan, he added, was for a Philippine delegation to go to France as the last JEC was held in the European state back in 2004.

In France, Domingo said they were able to meet with key players in the aerospace and aircraft manufacturing sectors, namely Airbus and Boeing. These companies have increased their orders from local suppliers, which have already expanded to five.

Previously, the Philippines was known to be home to three tier 1 original equipment manufacturers—Moog Controls Corp., B/E Aerospace, and Jamco. In 2013, Philippine exports of aerospace parts and components reached $294 million, a figure that has seen a significant increase compared to past export figures.

One of the aircraft companies they met, according to Domingo, was setting up a buying mission to the Philippines in September to increase its purchases from local suppliers. At present, the country supplies galleys, toilets, flooring and flight control systems, among others. Even the MRO firms were reported to be expanding as well.

“The future looks bright for the MRO industry. It is expected that more companies will set up here given the excellent handiwork of our skilled mechanics. Also boosting the sector is the growing demand for air travel,” Domingo added.

French companies, including Airbus, were also looking at the Philippines as their training hub, given the availability of highly skilled, English-speaking labor force in the country.

In London, the DTI was able to sign a three-year partnership agreement with the London-based Asia House to further boost the awareness and interest of United Kingdom-based companies on the trade and investment opportunities in the Philippines.