DOHA—More than $925 million is expected to be pumped into the Philippine economy as a result of 21 business-to-business deals that were firmed up as a result of President Rodrigo Duterte’s three-country swing to the Middle East, creating more than 21,000 jobs in the next five years, Trade Secretary Ramon Lopez said Sunday.
During his three-day visit, Duterte encouraged businessmen to invest more in the country, assuring them that the government will honor the sanctity of contracts between businesses.
“We will honor contracts. We will honor our obligations. That is in the Constitution itself that there shall be no impairment of the obligation of contracts. So insofar as trade is concerned, I can assure you, what we sign and I agree with you will be done even if we lose in the transaction, we will honor what we have promised,” the President said in a speech during the Philippines-Qatar Business Forum here on Saturday.
During his visit to countries which are members of the Gulf Cooperation Council, the President also secured 11 government-to-government agreements—three from Saudi Arabia and four each from Bahrain and Qatar, covering investment promotions, labor cooperation, strengthening of diplomatic ties, air services, avoidance of double taxation, and cooperation on culture, health and technical and vocational education and training.
The business-to-business deals secured in Saudi Arabia, Bahrain, Qatar and the United Arab Emirates were part of the administration’s “Dutertenomics,” expected to create more jobs and income opportunities through increased trade and investments.
Duterte got the biggest chunk of investments from Riyadh, where seven letters of intent worth $469 million were signed between Filipino and Saudi businessmen.
He visited the country from April 10 to 12.
Some 16,000 new jobs are expected from the Saudi investments, focusing on industries like ecozones for production of halal products and agri-industrial ecozones, pharmaceuticals, medical tourism, property development, and ports warehouses.
In 2016, Saudi Arabia was the 17th largest Philippine trading partner out of 226, according to Trade department data.
Last year, Philippine exports to Saudi Arabia grew by 4.34 percent to $82.46 million. However, the country’s imports from the kingdom dropped by 43.46 percent, largely due to depressed oil prices.
Crude, petroleum oil and oil obtained from bituminous minerals are the Philippines’ top imports from Saudi Arabia, accounting for 91.07 percent of the total with a value of $1.95 billion.
From 2008 to 2010, approved investments from the kingdom to the Philippines amounted to $4.14 million.
In Manama, which Duterte visited from April 12 to 14, a memorandum of understanding between AMA Group Holdings Corp. and Nader & Ebrahim Sons of Hassan Co. was signed to expand their operations in Mindanao by targeting an additional 10,000 hectares of farmland for agricultural production, expected to generate a first 3,500 jobs.
Once the facility becomes fully operational—a total of 560 metric tons of bananas, pineapple, mongo and lentils will be exported, amounting to $280 million. The new investment will also generate 40,000 jobs, Lopez said.
Bahrain ranks as the Philippines’ 79th trading partner, 65th export market and 101st import supplier.
“I see great potential in increasing bilateral trade and investments. The areas include oil and gas, food, agricultural staples, tourism, as well as establishment of Halal production in Mindanao. Investors can look upon the country’s IT [information technology] and BPM [business processing management] industries,” Duterte said.
He also invited them to find opportunities for partnership to realize the potential of the Philippines’ nonvoice sector: knowledge process outsourcing, animation, game development, as well as health information and management service.
The President is also targeting the removal of restrictions on aluminum exports to the Philippines, following a request from a Bahrain company from pursuing a business venture in the country.
“Even in the sharing of the natural resources, these are restricted areas of business that are not really attuned to the modern times. We will remove it,” Duterte assured the businessmen.
“As far as land is concerned, I can give you a 30-year lease and another 30 years,” he added.
The President gained the biggest number of investments in his visit Qatar from April 14 to 16, with 13 projects covering retirement villages, hotels, and tourism ecozones in Romblon, Davao or Cebu, IT & ecozone management services, hospitals and medical tourism, poultry and halal food processing, digital marketing and manufacture and export facility of nanostructured carbon.
A total of $206 million was generated from the business-to-business deals, equivalent to 5,770 jobs.
Lopez said that during the meeting of Duterte and Qatar Emir Sheikh Hamad bin Al Thani at the Amiri Diwan Royal Palace, one of the four bilateral agreements to be signed is an investment protection and promotion agreement.
“It’s like nine years in the making, so since 2008,” Lopez said. “Basically, we’ll give both parties, Philippines and Qatar, because we also have investments, the investments will be two-way not only Qatar into the Philippines but vice versa also.”
“[It] provides the basic rights and guarantees to investors. It gives also like a most favored nation type of treatment, equal treatment for both sides of investments being made. Of course, the identification of opportunities, cooperation in that field, assistance, ease of doing business are all included therein,” he added.
The country may also secure funding of up to $1 billion from the Qatar Sovereign Fund, whose details are still under discussion, Lopez said.
Two more projects from United Arab Emirates were also signed in Doha, including a $10-million agro-industrial project on a 500 to 1000 hectare property in Palawan and a $1-million coco peat/coco fiber processing facility in South Cotabato.
Lopez said that the government is working to tilt the trade imbalance between the Philippines and countries in the Gulf Cooperation Council, a situation that favors only the oil-rich countries relying on petroleum export. To do this, the Philippines must increase its exports to the three countries and narrow the trade imbalance, he said.