Increased investment interest in the Phl from the West

A year into the term of Ferdinand Marcos Jr. as president, more and more foreign investors, particularly those coming from the West, are now seeing the Philippines as an attractive investment destination. About P3.48 trillion in investment pledges were generated from the state and working visits of the President abroad, as well as his participation in regional and global summits that include the APEC leaders’ meeting in Thailand, the ASEAN-EU commemorative summit and the World Economic Forum in Davos.

The President’s visit to New York and Washington, DC has particularly sparked the interest of American companies who are encouraged by recent developments in the relationship between the United States and the Philippines as they see our country as the smart and safe investment choice. More than $5 billion in investment plans have been secured from American companies engaged in various industries, with $2 billion in investments already in place and confirmed by our Department of Trade and Industry.

European businessmen are also looking at the Philippines for investments in several sectors that include health, renewable energy, transportation and agriculture. EU business groups are ready to share their expertise in agribusiness management, sustainable farming techniques and market access to help the Philippines realize its potential in the area of agriculture.

EU businessmen are in fact keen to expand in the Asia Pacific region, and have earlier expressed interest in enhancing trade relations with the Philippines – citing our impressive economic and recovery path plus the strategic location of the Philippines, with about 40 percent of the global supply chain passing through the country’s territorial waters.

An article by the Associated Press mentioned a recent report by the European Union Chamber of Commerce in China that indicates an increasing number of foreign companies planning to move out, with business confidence on the decline due to growing unease over “security controls” and perceptions that the regulatory environment will not really improve in the next five years.

In addition to a slowdown in China’s economic growth (which dropped to 3 percent last year) as well as rising costs, anxiety is also fueled by the raids conducted by Chinese police authorities on three foreign companies without any explanation or indication about the possible violations these companies may have committed.

In a survey conducted by the European Chamber, two thirds of the 570 companies that responded said that doing business in China has become more difficult, with three out of five saying the business environment has become more political. The same survey also revealed that it’s not only foreign companies that are moving out but local ones as well, with two out of five Chinese customers or suppliers shifting investments out of China.

This development certainly presents good opportunities to highlight the Philippines as a very viable alternative, given our strong macroeconomic fundamentals and the fact that we are one of the fastest growing economies in the world today, with our GDP accelerating to 7.6 percent last year – one of the strongest in the region.

We are all aware the Philippines still faces a number of challenges with strong competition also coming from our ASEAN neighbors like Vietnam, Thailand and Malaysia, but I know our economic managers are focused on taking advantage of the opportunities that are starting to come our way. Hopefully, we will be able to get a large “piece of the pie,” so to speak, from foreign companies that are looking for alternative investment destinations, especially with our initiated infrastructure projects, more economic reforms and forward-looking policies that are attuned to the fast-changing global economic landscape.

As President Marcos noted, “the international situation has changed in terms of trade, in terms of geopolitics” so we are adjusting to such changes, knowing that the “most successful economies are those that are agile and resilient,” with the government putting the “basic elements” in place for us to do that.

We have been focused here in Washington on economic diplomacy, as we prepared for activities that we have lined up for 2023, starting with the investment forum conducted by the Philippine Economic Zone Authority (PEZA) that we hosted in January to highlight various opportunities for business in the more than 400 economic zones all over the Philippines. We are planning another one in November after the APEC meeting.

During the PEZA forum, we emphasized the readiness of the Philippines to engage the US business community in exploring mutually beneficial investment opportunities and boost economic ties as we deal with the lingering aftermath of the pandemic and the geopolitical realities not only in the Asia Pacific region but all over the world.

So far, economic reforms and legislative measures that have been instituted are encouraging more participation from foreign investors on a wide range of industries.

A week ago, we co-organized with the Philippine-American Chamber of Commerce an investment seminar to encourage Filipino-Americans in the Metro Washington, DC area to explore investment opportunities in the Philippines. Dubbed as “Invest Smart, Tax Smart,” the seminar had “tax whiz” Mon Abrea as resource person, who talked about Real Estate Investment Trusts (REITs), stocks, bonds and other investment possibilities. Mon also explained the incentives and tax exemptions available for Filipinos residing abroad who wish to invest or establish micro, small and medium enterprises (MSMEs) in the Philippines.

Clearly, the Philippines offers compelling propositions for investments, trade and other economic partnerships for both the American private sector and Filipinos in the US. There is a very strong upbeat feeling about the Philippines among many potential investors here in the United States – hopefully we can take advantage of this.

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