The Philippines will launch negotiations on a comprehensive economic partnership agreement with the United Arab Emirates once they finalize the investment promotion and protection deal.
“We hope that together with the Ministry of Economy of the UAE, we can further strengthen the economic relationship between the UAE and the Philippines,” said Trade Secretary Ramon Lopez at the country business briefing for the Expo 2020 Dubai.
The Expo 2020 Dubai was originally planned to be staged on Oct. 20, 2020 to April 10, 2021, but was postponed to Oct. 1, 2021 to March 31, 2022 over the COVID-19 pandemic.
Lopez said the Philippines is willing to host UAE-based start-up companies that are into advanced technology, which would require $100,000 of capitalization and an initial workforce of 15 employees from the local labor pool.
He highlighted the advantages the Philippines offers particularly in preferential access to major markets through bilateral and free trade Agreements.
The Philippines’ continues to have access to the European Union’s Generalized Scheme of Preferences Plus, which UAE companies would also be entitled to access once they locate their industries in the Philippines, according to Lopez.
“Likewise, we are currently working to push for more products to be included in the talks for the US GSP, which is under discussion for renewal. These add to the value of making the Philippines a manufacturing location for your products, as products manufactured within the country may enter the US GSP market,” Lopez told prospective investors and businessmen.
He said the Philippines is also part of the Regional Comprehensive Economic Partnership Agreement which is intended to create a more business-friendly environment in the ASEAN region.
RCEP will lencourage closer integration of economies and provide a more stable and predictable rules-based system of trade.
The Philippines has been proactive in enhancing strategic bilateral and regional relations with other trade partners, like the continuation of the Philippine-EU FTA monitoring missions and the recent conclusion of the negotiation for the Philippine-South Korea FTA.
Lopez said to make the investment climate in the Philippines significantly more attractive, the government adopted the CREATE Act which rationalizes, modernizes and offers more relevant incentives to investors.
This will reduce the corporate income tax rate from 30 percent to 25 percent for large corporations and down to 20 percent for micro, small, and medium enterprises.
“We aim to attract a higher level of technology in the industry sectors, such as in electronics, aerospace, and automotive. That is the reason why we are giving more favorable terms and incentives to those industries with high technology and entice more FDIs in that particular field,” Lopez said.
He said the Philippines has strong fundamentals, while recovering from the COVID-19 pandemic with a growth of 5.6 percent in 2021.
He said another game-changer that may catch the interest of Dubai investors is the approval by the Philippine Congress and the Senate of Public Service Act amendments.
Once the bill is signed into law, foreign equity participation in key sectors will be eased from a maximum of 40 percent to 100-percent foreign equity.
“This game-changing policy shall attract more global players that will modernize several sectors such as in telecommunications, shipping, air carriers, railways, and subways. Similarly, the amended Retail Trade Liberalization Act and the Foreign Investment Act are expected to establish reforms to remove barriers for foreign entry,” Lopez said.