The Philippines remains the top investment hub in the region in spite of tough competition from neighboring countries and the growing tension with China, Tereso Panga, the director general of the Philippine Economic Zone Authority (PEZA), said.
He said the country remained competitive through the Regional Comprehensive Economic Partnership (RCEP).
"Currently, we have companies in the economic zones that are already coming from the RCEP member countries, but we [also] have non-traditional sources of investments that are part of the RCEP, the likes of Australia, New Zealand," he said.
"These are the exciting economies that we'd like to tap for investments as well as exports. So, right now, we are doing well with our investment promotions," he said.
Panga said the country has been luring more investments because of its high labor productivity and the incentives it offers, such as value-added tax (VAT) exemption on importation and VAT-zero rating on local purchases of goods and services.
"I can say that there is a very stiff competition when it comes to [attracting] foreign direct investment because we are up against other Asean economies. They try to give all concessions, from incentives [to] infrastructure development, just so they are able to bring in more investments into their economy," he said.
Panga said the country's biggest selling point "is our labor, the high productivity of our labor."
The setting up of green lanes for strategic investments will also fast-track the processing of documents for investors, he said.
"This has been the selling point of PEZA whenever we invite investors to locate in the economic zones," he said.
He said he believes the dispute in the West Philippine Sea between China and the Philippines will not affect investment growth, since China is among the Philippines' top investors.
"Our thinking is that if we are able to bridge Chinese investments coming to the Philippines to invest, somehow it [will] mitigate the tension ... going on [at] the geopolitical side," he said.
"With our entry into RCEP, we are anticipating more investments, especially coming from China. Some of the big tickets of investments are coming from China," Panga said.
In 2022, China's investment pledges reached approximately $25 million, or P1.43 billion, making it the country's ninth-biggest source of investments.
Panga said he is inviting investors in the energy sector to locate in the country's economic zones and help bring down the cost of electricity, which is among the highest in Southeast Asia.
"The number one concern of our locators is the cost of power. We are trying to address that by subscribing to the principle of a distributed energy system where we are able to invite investors to actually set up facilities in the economic zones," he said.
"If we have embedded power [in the ecozones], it [will] be able to provide energy for our locator companies," Panga said.
There are 20 ecozone projects throughout the country waiting for presidential approval.
He said he met recently with the Antique provincial officials who want to go into ecozones. "They want to replicate the Bali, Indonesia, type of ecotourism," he said.
An American Taiwanese investor with solar dish technology wants to put up a renewable energy facility in Suyu, Ilocos Sur. Another investor is interested in building a second barge terminal in Tanza, Cavite, to decongest the harbor there, Panga said.
PEZA is an agency attached to the Department of Trade and Industry. It is the biggest ecozone authority and one of the top investment promotion agencies in the Philippines. There are 420 ecozones hosting 4,372 locator companies, mostly export-oriented.
The ecozones have generated 1,809,217 direct jobs. The National Economic and Development Authority said for every direct job created in the ecozones, five more jobs are created outside, resulting in 9,046,085 indirect jobs.
Source: Manila Times