DTI sees more perks for foreign investors
The Department of Trade and Industry (DTI) wants to remove the current fiscal incentive regime’s “export and nationality bias” in order to allow more foreign businesses to set up shop in the country.
“The DTI is in favor of pushing for a liberalized Philippine economy to allow the entry of more players in local industries where foreign ownership or participation is currently restricted. We are reviewing the Foreign Investment Negative List in order to open activities where foreign equity is limited. Our target is to open up industries that could create high quality jobs and income,” Trade Undersecretary Ceferino S. Rodolfo said during a forum organized by the Nordic Chamber of Commerce of the Philippines.
He said this was in line with the current administration’s thrust towards modernizing the existing incentive system.
“We are also pushing at the Board of Investments (BOI) for a modernized incentive system. (Currently) in the BOI, we’re only allowed to give incentives mostly to domestic companies or to companies that have a maximum 40 percent foreign ownership, except for companies that are going into exports. So we’d like to remove that export bias and nationality bias, because for us, the strong growth of the Philippine economy is actually the biggest attraction for any company to go here,” Rodolfo said.
Creation of jobs
He said the nationality of companies and its owners does not matter. “What matters are the jobs that are being created in this country.”
The Philippines enjoyed a strong economic growth of 7.1 percent in the third quarter, making the country the fastest growing nation among major Asian economies.
Inflation also remained muted at 2.3 percent as of October 2016.
Rodolfo noted foreign direct investments posted net inflows of $4.2 billion for the first semester of 2016, almost 95 percent higher than the $2.2 billion recorded in the same period a year ago. Total BOI foreign and local investment approvals from January to September 2016 also increased by more than 48 percent to P286 billion compared to the same period last year.
“Our financial and banking systems are healthy and robust and our credit rating continues to receive stable and positive investment grades. Many analysts believe that the economic growth momentum is likely to be sustained under the leadership of President Duterte… Business and consumer confidence are expected to remain strong to meet our full year [gross domestic product] target of 6 to 7 percent,” the trade official added.
