RP urged to offer more incentives to attract Taiwan investments

Taipei – Taiwan is asking for several incentives from the government to entice more Taiwanese investors to invest in the country.

Tseng Sheng-bao, director general of Taiwan’s export processing zone administration (EPZA), in a briefing for visiting Filipino journalists said the Philippines would attract more investments if it offers more incentives, especially in the Subic Bay Freeport where most Taiwanese companies locate.

One of the incentives Taiwanese firms want, Tseng said, are lower land lease rates.

Land lease cost, Tseng said, accounts for a sizeable portion of a company’s operational expenses.

In Taiwan, Tseng disclosed, companies enjoy free rent/lease for the first four years of their operation.

Thereafter, the companies just pay half or 50 percent of the rent/lease for the next six years.

The Philippines, Tseng suggested, should extend the same terms to Taiwanese locators in the Subic Freeport.

Taiwan continues to seek a lowering of the local content requirement from the ASEAN-mandated 40 percent to 25 percent which would allow the entry of more Taiwanese products to the Philippines and possibly to the rest of ASEAN.

The ASEAN local content requirement ensures that at least 40 percent of the raw materials used in products manufactured and sold in the region come from the region.

Taiwan is not a member of the Association of South East Asian Nations (ASEAN). Taiwan for its part, Tseng said, is working on allowing more Filipino workers to seek employment in Taiwan.

Current Taiwanese labor law allows Filpino workers only a maximum of six years to work in Taiwan after which they are not allowed to extend their stay in the island nation, resulting in the illegal "born again" scheme resorted to by some workers to return to Taiwan.

"We are trying to make the process more convenient but we still have some difficulties," Tseng admitted.

Taiwan employs around 90,000 Filipinos, about 6,760 of whom work in economic zones.

Tseng assured that the Taiwanese Government is encouraging Taiwanese entrepreneurs to invest in the Philippines especially with the implementation of an economic corridor between Taiwan and the Philippines.

Taiwan’s total exports to the Philippines reached $221 million in 2005, while its imports amounted $102 million.