DOF urges Japanese firms to invest in Philippines

MANILA, Philippines — The Department of Finance (DOF) is inviting more Japanese firms to invest in the Philippines amid the country’s robust economic growth.

During a recent meeting with a delegation from the Kansai Economic Federation (Kankeiren), Finance Secretary Carlos Dominguez called on Japanese companies to take advantage of the Philippines’ bright economic prospects.

“We would like to point out that actually, our economy is growing very quickly. If you want to participate in the local economy, you have to better invest here,” Dominguez said.

Dominguez said Japanese investors stand to benefit from the reforms being implemented by the Philippine government.

“We’d like to make you feel welcome, but what will make you feel welcome is the improving disposable income of our people, improving infrastructure, improving peace and order, and I’m sure many Japanese companies can certainly benefit here,” he said.

The finance chief also assured the Kankeiren delegation that the proposed second package of the government’s Comprehensive Tax Reform Program (CTRP) – which aims to cut corporate income tax rates and rationalize investment incentives – is seen as a “game changer” that would expand, rather than curtail, opportunities for investors to do business in the Philippines.

Dominguez said fiscal incentives under the tax reform program would not be removed, but would instead be rationalized or improved to ensure that these are performance-based, targeted, time-bound and transparent.

“Rather than look at the effect of tax reform on some companies, look at the effects of tax reform on the entire economy because it is making it better. Instead of looking at the place where you might lose, look at opportunities in the larger economy,” he said.

He said the current system of fiscal incentives, despite being the longest and most generous among the ASEAN economies, has not attracted more investors to the Philippines, which remain among the lowest recipients of foreign direct investments (FDI)s in the region.

The DOF secretary added that investors are more concerned about the country’s poor infrastructure as this drives up logistics cost. He said this is among the reasons why the Duterte administration has been investing heavily in its Build Build Build program.

Dominguez said the second tax reform package would also help attract investors because of the reduction in the corporate income tax rate, making it at par with other countries in Southeast Asia.

He also assured Kankeiren that the one-stop shop that Japanese investors are currently enjoying through the Philippine Economic Zone Authority (PEZA) would not only be retained, but would also be the norm for all business applications in the future, following President Duterte’s signing of the Ease of Doing Business Act last year.

“Everything that makes business easier, we will keep and we will improve,” Dominguez said.