Finance Secretary Carlos G. Dominguez III–DOF photo
MANILA, Philippines—President Rodrigo Duterte’s chief economic manager is urging Japanese investors to pour money into the Philippines, especially in sectors recently opened wider to foreign investments by amended laws.
Finance Secretary Carlos Dominguez III told Japanese businessmen at an investors’ briefing last Tuesday (April 26) that the airline, media, retail, private transportation, renewable energy, and telecommunications sectors, among others, would now benefit from the three liberalization laws recently approved by Duterte.
Dominguez was referring to amendments to the Foreign Investments, Public Services, as well as Retail Trade Liberalization laws, which Duterte’s economic team had pushed in lieu of amending the restrictions enshrined in the 1987 Constitution.
For one, “now that market entry barriers in the retail industry for foreign retailers have eased, we urge you to establish and expand your retail trade operations in the Philippines,” the finance chief said.
Since majority Filipino-owned “public utilities” were now limited to a few sectors and other public services can have full foreign ownership, “we encourage experienced and strategic investors in Japan to bring their capital into the country, especially in the fields of telecommunications; media; and private transportation vehicles and renewable energy,” he added.
On the amended Foreign Investments Act, Dominguez said it “liberalizes the practice of professions, thereby creating opportunities to attract foreign investors that would otherwise be unable to do business in the Philippines without foreign talent.”
“These three forward-looking measures widen the horizon for investments. They create numerous opportunities for synergy between local and international firms,” the outgoing finance secretary said.
“There is now enough space for international firms to form joint ventures with Filipino companies, especially those at the cutting edge of information technologies,” Dominguez said.
The Department of Finance (DOF) earlier estimated attracting at least $10 billion in brick-and-mortar foreign direct investment (FDI) yearly with the three economic liberalization laws, plus the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act already in place.
The CREATE law had empowered the President to grant hefty tax perks to entice elephant-sized investments, upon the recommendation of the interagency Fiscal Incentives Review Board (FIRB). It also slashed to 20 percent the corporate tax rate slapped on micro, small and medium enterprises (MSMEs), faster than the tax reduction among large firms to 25 percent from 30 percent previously, which had been the highest in Asean.
“I invite Japanese investors to look closely at the Philippine economy in the light of the pro-business policies instituted and institutionalized by President Duterte over the last five and a half years. The Philippines is a growth leader in the region and a reliable host for international partnerships particularly partners from Japan,” Dominguez said.