By Janina C. Lim
THE DEPARTMENT of Trade and Industry says the Philippines has been able to attract investors from China, which is in the middle of a trade war with the United States.
“More of Chinese investors. Before, only $50 million a year. Very small. Now almost $1 billion,” Trade Secretary Ramon M. Lopez said in a mobile phone message on Monday when asked for updates on the status of Philippine efforts to lure investors from China amid uncertainty due to its trade row with the United States.
Economists have noted that the trade war will benefit the Philippines and other countries near China that offer viable relocation sites for locators that want to dodge rising US tariffs.
But geographic proximity is just one consideration.
Philippine Economic Zone Authority Director General Charito B. Plaza had said that uncertainty amid current moves to streamline the country’s package of investment incentives by removing perks deemed redundant has been keeping prospective investors away.
In order to seize opportunities amid the US-China trade spat, the Foundation for Economic Freedom (FEF) said in a press release on Monday that “[t]he Philippines could become an alternative destination for thousands of these factories seeking to avoid the US-China trade war,” noting that the country “has a highly skilled, English-speaking workforce.”
‘NOT WITHOUT COMPETITION’
But “[t]he Philippines is not without competition in the contest to attract these China-based factories to relocate,” FEF said.
“Other countries such as Vietnam are moving aggressively and with lots of incentives to boot with more liberal foreign ownership laws and less onerous labor regulations,” the group noted.
“The government owes it to job-seeking Filipinos to seize this opportunity to attract thousands of factories to our shores.”
The group recommended prompt enactment of the bill that will cut corporate income tax rates and streamline fiscal incentives and the proposed Public Service Act amendment to remove restrictions to foreign ownership and participation in public transportation and telecommunications.
“The quality, cost and efficiency of transportation and telecommunications are inputs to the decision of companies whether to relocate here,” FEF noted.
“Therefore, we need more foreign investment in the strategic sectors of transportation and telecommunications to bring more competition, improve services, and lower prices.”
USE PPP MORE
The group also asked for implementation of the measure designed to further ease doing business and rejection of the bill that will further restrict labor contracting modes since this will hinder flexibility of businesses, especially in dealing with disruption caused by technology.
The FEF also asked the government to implement its “Build-Build-Build” infrastructure development program “seriously and quickly” in order to bring down logistics costs. “We recommend that the government shift to public-private partnership (PPP) where feasible but undertake projects under official development assistance or General Appropriations Act whenever there is no incentive for private participation. The government should also quickly make a decision on the rehabilitation and expansion of the Ninoy Aquino International Airport and the Davao airport by private companies.”