THE Department of Trade and Industry (DTI) urged Chinese investors to expand their businesses in infrastructure, equipment manufacturing and information technology in the Philippines.
Trade Undersecretary and Board of Investments (BOI) Managing Head Ceferino Rodolfo recently met with representatives of the Chinese Enterprises Philippine Association (CEPA), pitching the country as an ideal investment destination despite the ongoing pandemic.
The BOI organized the briefing in partnership with the Philippine Trade and Investment Centers in China to encourage existing investors to further expand and diversify investments in the Philippines.
“Our country remains competitive not only in terms of attracting foreign investments but also in cementing its business-friendly positions,” Rodolfo said.
He said the government is upbeat about the post-pandemic recovery of the country given that the economic fundamentals have remained intact. The DTI official cited the 1.4 million jobs restored based on the latest labor force data and the steady manufacturing index.
“We even reached the second-highest level of approved investments in 2020 (in the Agency’s history) despite the pandemic with over P1 trillion. For 2021, we hit P138 billion as of March, a 66-percent improvement from P83 billion in the same period last year,” he said.
Foreign direct investments even improved by 41.5 percent to $961 million in January from $679 million year-on-year, Rodolfo added.
Meanwhile, Rodolfo said the recently enacted Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act is also beneficial to Chinese investors.
He stressed this measure provides fiscal and non-fiscal incentives for high-value strategic investments, which include a longer period for income tax holiday (ITH) and tax subsidies.
CREATE reduced the corporate income tax to 20 percent from 30 percent for domestic corporations with net taxable income of P5 million and below and have total assets of P100 million and below effective July 1, 2020. All other local firms and resident foreign companies are imposed with 25-percent income tax.
“This will open up cash flows to support the efforts of businesses to rebuild during this pandemic and allows the country’s recovery and boost our long-term growth,” Rodolfo said.
Established 20 years ago, CEPA has around 90 members, mostly state-owned companies with stakes in agriculture, manufacturing, construction and technology.
Philippine exports to China declined by 2.3 percent to $9.59 billion last year from $9.81 billion in 2019. Imports from China, meanwhile, plunged by 22.1 percent to $19.85 billion in 2020 from $25.5 billion year-on-year.
BOI and Philippine Economic Zone Authority approved investment pledges amounting to P14.07 billion from China last year, which is 84 percent lower compared to P87.99 billion in 2019.
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