The British Chamber discussed and thanked Secretary Recto on the recent passage of the Anti-Agricultural Economic Sabotage Law, mandating the creation of the Anti-Agricultural Economic Sabotage Council chaired by the President of which the Department of Finance is a member of, along with other agencies such as the Department of Agriculture, the Department of Justice and the Department of Trade and Industry, among others. The discussion also centered on lowering inflation, the importance of ensuring food supply in the country, and lowered tariffs on agricultural products.

The British Chamber also discussed the recently signed Anti-Financial Account Scamming Law and the desire to pass the Cybersecurity Act and the E-Governance Act into law, which are also tagged as priority bills by the President Marcos administration. The UK as a global financial and cybersecurity hub can offer innovative solutions and best practices in terms of the Philippine government’s priority towards digitalization and strengthening its cybersecurity infrastructure that leverages partnership between the UK and the Philippines and its competitiveness in the region.

The discussion further noted the importance of lowered tariffs on food imports and expressed appreciation for the growing British pork exports in the Philippines. The British Chamber has consistently worked with the UK Agriculture and Horticulture Development Board (AHDB) and supported the extension of lowered tariffs on agricultural commodities including pork until 2028. AHDB has reported a 26% increase in pork exports in the first seven months of 2024 amounting to a value of over £21.8 million. The lifting of the temporary ban on UK beef is also seen as a significant move towards further promoting British meat in the Philippines and has recorded a value amounting over £2 million in the same period. This reinforces the significance of ensuring the stability of food supply, easing inflationary pressures, and reduced tariffs on rice, pork, and other agricultural commodities.

“The Philippine government is creating a business environment that promotes and encourages foreign investment. We are enacting recent policy reforms, that strategically broaden the participation of foreign companies in key sectors of the Philippine economy,” said DTI Secretary Fred Pascual during a meeting with Sojitz Corporation on June 19.

Pascual together with the Philippine Economic Team and representatives from various Philippine government agencies, met with Sojitz Corporation Executive Officer, President, and Chief Operating Officer Kosuke Uemura.

The Trade Chief discussed that the Philippine government is actively working to create a conducive business climate in the Philippines through amendments to key legislation such as the Retail Trade Liberalization Act, Foreign Investments Act, Public Services Act, and Renewable Energy Act. These policy reforms have captured foreign participation in previously restricted sectors, increased foreign direct investments, and accelerated economic growth.

Moreover, the establishment of green lanes for strategic investments has streamlined the investment process. As of May 31, 2024, the DTI has approved green lane endorsements for 68 projects, attracting USD 35 billion in investments across various sectors, including manufacturing, digital infrastructure, and food security.

The DTI acknowledges the concerns raised by foreign investors regarding value-added tax (VAT) incentives. Notably, the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act’s implementing rules and regulations have been amended to address VAT-related issues experienced by registered business enterprises (RBEs).

In collaboration with the Department of Finance, the DTI continues to work towards a simpler and more efficient VAT regime through the CREATE MORE Bill, which recently gained second-reading approval in the House of Representatives.

The head of DTI’s field office in Japan, Commercial Counselor Dita Angara-Mathay, reported that Sojitz envisions more investments in cell tower construction and co-location. The company is also eager to contribute to the country’s food security and farmers’ welfare programs through its science-based farming project utilizing, among others, its high-quality NPK fertilizer.

These interests were validated by the presence in the meeting of the trading house’s Executive Officer of Aerospace, Transportation, and Infrastructure, Mr. Masakazu Hashimoto; and the Executive Officer and COO of the Consumer Industry and Agriculture Business, Mr. Hideo Hatada.

Recognizing the vital role of public-private partnerships in economic development, the recently enacted Public-Private Partnership Code of the Philippines streamlines collaboration between the government and private sector to promote the efficient delivery of critical infrastructure projects.

“The DTI extends a warm invitation to Japanese businesses to explore the vast opportunities within the Philippine market. With a strong economic foundation, a commitment to a transparent and investor-friendly environment, and a shared vision for a sustainable future, the Philippines stands ready to solidify its position as a strategic partner for Japan,” Secretary Pascual said as he pitched the country’s strong economic potential to Japanese businesses.

The meeting with Sojitz Corporation leveraged the company’s established presence in the Philippines, with various investments in fertilizers, mining, food production, and automotive dealerships.

Sojitz Corporation is a leading general trading company in Japan, established in 2003 through the merger of Nichimen and Nissho Iwai. With a presence in over 70 countries, the company is engaged in various businesses, including manufacturing, sales, import/export, and investments across various sectors, such as automobiles, aerospace, energy, and consumer goods.

The Office has saved up an amount that will allow the purchase of its own property without compromising its operations.  IPOPHL carefully reviewed its options, which included constructing a building within the UP Diliman property where the land will be on a 25-year lease agreement. In this arrangement, however,  the structure shall be owned by UP Diliman thereafter. 

IPOPHL also considered joining the proposed One DTI Building along Macapagal Avenue; purchasing an entire building; or buying a lot to construct a building.  However, these proved either infeasible or too costly for IPOPHL’s modest funds, hence, the decision to purchase two entire building floors of a finished structure for IPOPHL’s exclusive use instead.

On the potential sites, IPOPHL surveyed areas within the Makati, Ortigas and Taguig central business districts where majority of IP law offices are, but it was either prices were beyond IPOPHL’s range or available spaces were not enough nor appropriate.

After numerous ocular inspections and consultations from various relevant government agencies, IPOPHL pursued negotiations with Arthaland Development Corp. over the purchase of two floors totaling 5,999 square meters in Savya Financial Center located in Arca South.

Touted as the next BGC, Arca South is poised to be the next large-scale business and lifestyle district in Metro Manila being the site of a sub-station of the subway train station. It is also convenient for most of IPOPHL’s clients, stakeholders and employees as it is not very far from its current location of the IPOPHL office along McKinley road.

The acquisition will expand IPOPHL’s current office space of 5,091 sqm by about 908 sqm.  The additional space will also serve IPOPHL’s fast-growing manpower. In March 2021, its plantilla positions jumped by 62% from 308 to 498 with the approval by the Department of Budget and Management of additional 192 positions.

According to IPOPHL Director General Rowel S. Barba, “with a permanent home, we see greater financial sustainability and greater fiscal space to work on our programs and create a greater impact for our innovative and creative communities.”

Exercising fiscal prudence to ensure long-term financial sustainability, IPOPHL became a self sustaining government agency in August 2006, meaning it does not get any single centavo from the national government and only gets to spend money earned by the agency.  Part of its fiscal strategy then required temporarily leasing office space and at that time, McKinley proved to be a strategic and viable location as Bonifacio Global City and nearby areas were still being developed and rentals were still low.  

“With rent escalations of 5% per year, it is to the best interest of IPOPHL and the government to invest its retained earnings in real estate which will result in lease savings amounting to P4.7B over the next 25 years.  These savings may very well be diverted to service upgrades and expansion, helping improve our online services, pursuing our Digital Transformation program, and helping more businesses, innovators and creators in the country protect their IP assets,” the IPOPHL chief said.

“We hope this acquisition will allow us to comply with the issuance of COA to whom we send regular updates to ensure we observe public financial accounting standards,” Barba added.