Thank you Secretary Fred Pascual for that thumbnail sketch of all of the prospective investments that we are looking at.
At the outset, allow me to thank all of you to have found the time to come to this roundtable discussion to talk about possible investments in the Philippines and why they are attractive and what we have done to make the Philippines a more investment-friendly destination than it has ever been.
And to also highlight the areas where we have put the emphasis on in terms of the economic transformation that we are undertaking for the Philippines.
So, thank you very much and I would like to talk a little bit about what are the possibilities and what are their potentials in the Philippines in terms of the joint agreements that they can come to, the partnerships that they can come to.
One of the central elements of our economic policy is to encourage all sorts of partnerships and not solely within the Philippines but PPPs, for example, with the government G2G arrangements, whatever is possible, joint venture arrangements. And these are the things that we feel are going to be the multiplier effect for us because although the government can do much, it cannot do all.
And we have placed our private sector partners both here and abroad – both in the Philippines and abroad – as a front and center in terms of our partnership as we feel that this synergies that we can achieve between government and the private sector are going to be critical if we are to succeed and to achieve the targets that we have proposed for ourselves.
So, let me discuss first the Philippines’ fundamentals, and how we have fared amidst the recent global challenges. The Philippines has shown healthy signs of recovery from the economic downturn, of course, brought about by the pandemic. We were able to register 7.6 GDP growth last year. And this makes us one of the best-performing economies in the Asia Pacific region.
For the first quarter of this year, the Philippines outperformed its peers in the region by posting the GDP growth of 6.4%, that is the first quarter, which is within the country’s 6 to 7 percent target for the year.
The reason that we put such emphasis on the growth figures is that as all the countries have gone into debt, a higher rate of debt-to-GDP because of the pandemic and the costs of the pandemic response [garbled] for all the countries. It is our fundamental theory that we should grow out of that debt.
And that is why we are pushing very hard and look at growth and employment. And those are the essential measures that we look at when we try to provide a quick sketch of the situation in the Philippines.
Earlier in the year, we rolled out our Philippine Development Plan for 2023-2028. We have listened to what global investors have been looking for and the country has come up with an economic development plan which is centered on partnerships and, of course, on trade – and in this case, even looking for non-traditional trade partners, suppliers, and markets.
As I’m sure everyone has experienced to a greater or lesser extent the traditional countries, markets that we had counted on were unable to operate in the same way during the pandemic and even up to now after the pandemic.
And therefore, we have to adjust and to look for what we refer to as non-traditional partners. The geopolitical situation also dictates that we have to have options so that should a global crisis like a pandemic arise once again, we still have the availability of these markets so that the trade can go on, the production can go on, the exchanges can go on.
In 2022, Malaysia was the fourth top source of Philippines’ Foreign Direct Investment with an investment of US$108 million, which is a good indication that the Philippines is a preferred investment destination for Malaysian companies.
Earlier this morning, I had the benefit of meeting a number of Malaysian businesses in the key sectors of agriculture, transportation, and technology. The insights from these meetings have further convinced me that we are moving in the right direction with structural changes that will establish the Philippines as the ideal investment partner for Malaysian businesses.
Let me take the opportunity to thank these Malaysian companies who have expressed an interest in expanding their investment and operations in the Philippines. The investments that we have agreed on so far will inject a total of about $235 million serving as a robust and affirmative indication of the ongoing trust and keen interest of businesses and investors in the Philippines.
The engagement with the Malaysian companies and business leaders this morning yielded mutually beneficial outcomes for both the Malaysian companies and the Philippines.
At present, Malaysian investments already provide a valuable contribution in advancing the country’s economic development particularly in terms of the administration’s food security, infrastructure development, and job generation agenda for our countrymen.
We continue our commitment to support not only prospective Malaysian investors, but most particularly, the Malaysian companies who are already doing business in the Philippines. We have identified manufacturing, agribusiness, service industries, infrastructure and property development, energy especially renewable energy, and the BIMP-EAGA priority industries as the priority sectors for investment promotion to Malaysia.
Let me focus on the policies and programs that we have set in motion to support our proposition for the Philippines as your strategic partner for regional growth and investment.
We have broadened the range of liberalized businesses and sectors, through the passage of key landmark legislations such as the Retail Trade Liberalization Act, the Foreign Investments Act, the Public Services Act, and the Renewable Energy Act. Through these measures, we have opened up sectors including air transport, telecommunications, shipping, retail, and renewable energy projects to foreign ownership.
We have made our system of corporate taxation more business-friendly, with a lowered tax rate and improved mechanism for tax and incentives. We continue to seek ways to facilitate and expedite investments. We have recently established what we refer to as “green-lanes” for strategic investments, as a means to establish a whole-of-government approach to facilitate at the highest levels of government, the critical investments necessary for the development and competitiveness of our economy.
Essentially what we refer to as green-lanes are— since while we are waiting for the many more amendments, especially taxation, legislation, procurement, accounting all of these things that have to be modernized, we have created these green lanes to facilitate prospective investors in going through the [inaudible] process, going through the documentary requirements.
I would also like to introduce the gentlemen seating on my left here is the Speaker of the House, Speaker Martin Romualdez and he is a critical part here, and the rest, we have two senators also here, Senator JV Ejercito and Senator Mark Villar, who have been critical in assisting us pushing this legislation – these amendments to the legislation through Congress. And to get this amendment— to get the new laws enacted.
That’s why we are still in the process right know we could say of rationalizing some of the parts of the tax code that really have become— I would say obsolete and need to be rethought and reengineered really for the new economy that we are all in after the pandemic.
The Philippines— we are also— is also leveraging on the active participation in multilateral platforms to sustain and promote its economic agenda. The Regional Comprehensive Economic Partnership or RCEP officially entered into force for the Philippines on the 2nd of June. With our participation in RCEP, we strengthen our participation in regional supply chains, with an objective of attracting more foreign direct investments.
There is a significant potential for complementation between our two countries. We take pride in our key asset— it’s our people. The Philippines boasts of a deep pool of human capital who are highly skilled and educated, talented, and dedicated to take on various roles in different sectors.
Our country sits on an ideal demographic spot with a median age of 25 years old, which translates to immense potential in achieving breakthrough growth through greater productivity, higher savings rate, and increased creativity.
We recognize the important role of mid-tier companies in the regional value chain. We invite you and offer the key advantages of the Philippines as a strategic choice for the expansion of your mid-tier companies.
The Philippines is not only a market for 109 million individuals. It also provides a strategic launch-pad for your exports to compete in regions like the European Union. And with the Philippines’ EU GSP Plus Advantages, local manufacturers and investors enjoy zero-tariff access to EU for up to 6,000 product lines.
And there is a proposal that we are going to strengthen that cooperation between the Philippines specifically and the EU as part of their drive— of the EU’s drive to look to Asia for the leadership to provide the leadership that they needed by all the other economies around the world.
It is a new development, it’s not something we’ve seen before. But again with the globalization, the advent of globalization and the continued shrinking of our planet, then it seems to be a natural next step.
So with these advantages before us and with these elements that we can put together, and we are here not only to talk about the advantages and the benefits of investing in the Philippines, we are also here to listen to our prospective investors to see what it is that the Philippines can do, what are the structural changes that are necessary so that investment becomes more— the Philippines becomes a more attractive investment destination.
So let me end with the assurance of our commitment to support you, our friends in Malaysia. And I thank you for your trust and confidence. And I hope that the Malaysian business community, together with your Philippine counterparts, can work together in partnership to unlock value in our region.
So once again, thank you all very much for taking the time to attend to be with us today. And I hope that this will be the beginning of a much stronger and increasing… The trade between Malaysia and the Philippines has been pretty much on a steady flatline.
We have to work hard to increase that line and make it grow. And that is why we are here to listen to see what it is that we in the Philippines can do to facilitate these investments for the mutual benefit not only of your corporations but also our two countries.
Thank you very much and good morning.
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