In the Philippines, the micro, small, and medium enterprises (MSMEs) remain the backbone of the country’s economy. As we navigate through the endemic COVID-19 disease, the aim for accelerated economic recovery and the need to bolster foreign investment in the country is empirical.

While the growth of MSME in the country continues to strengthen the economy on its much needed recovery, foreign investment is critical to achieving economic growth.

The Philippines being one of the countries in the ASEAN region that has a lot of opportunities to offer to foreign investors for various sectors such as telecoms, transportation, renewable energy, technology, banking and finance, among others.

Given the strong investors’ confidence in the Philippines, the need for the country to have a comprehensive guide on how to do business in the Philippines will pave the way for drawing strong interest from potential foreign investors.

Cognizant of the need for a comprehensive, transparent and forthright process of doing business in the Philippines, the European Chamber of Commerce of the Philippines and Divina Law partner to unveil the Doing Business in the Philippines 2024 Guidebook 5th Edition.

The release of the guidebook provides prospective foreign investors a bird’s view of how they can take advantage of the investment opportunities in the Philippines, including the minute steps of business registration, capitalization, tax, and industries available for foreign investors, among others.

Also covered in the guidebook are industries and specific regulations in the Philippines renewable energy (RE), financial technology, and telecommunications. Other topics include setting up business in the country, taxation, labor & employment, immigration, and Intellectual Property (IP), among others. 

ECCP President Paulo Duarte said that the guidebook aims to empower businesses and attract more investors. Aside from highlighting the key economic reforms such as the amendments to the Public Service Act (PSA),  the Retail Trade Liberalization Act (RTLA), and the Foreign Investment Act (FIA), Duarte mentioned the liberalization of renewable energy and the hope of ECCP in the official resumption on ‘prospect’ of the EU-Philippines Free Trade Agreement (FTA) negotiations.

“While acknowledging these substantial strides, the ECCP remains steadfast in its commitment to fostering increased foreign direct investments (FDIs) in the Philippines,” added by Duarte. 

More EU-Phl investments

It is an optimistic year for the Philippines in attracting more trade and investments through collaborative efforts with the European Union’s (EU) initiatives and participating in their cooperative programmes. 

According to H.E. Luc Veron, Delegation of the European Union in the Philippines, the EU and the Philippines have entered a new era of bilateral relations. Ambassador Veron shared that the Philippines will continue to benefit from the EU GSP+ preferential trade regime until 2027. 

“The EU is encouraged by the efforts of the government to improve the ease of doing business. What we look at is a further streamlining of administrative processes relevant for business, in particular, at the local level,” EU Ambassador Veron added.  

Norwegian Ambassador Christian Halaas Lyster, on the other hand, shared updates on the European Free Trade Association (EFTA), encouraging the Philippines “to identify areas with high potential for more exports” from the country as this would benefit the economy and the people. He also emphasized that in any business in the world, corruption is not good, and thus must maintain the integrity and stability to attract more investors. Ambassador Lyster also hopes that the Philippines “to take a more active approach” such as conducting more market research for export growth and a boost in economic ties.

During the meeting, Secretary Pascual emphasized the need for the immediate reauthorization of the US Generalized System of Preferences (US GSP). He highlighted the robust trade scheme that the Philippines has created for companies exporting to the US market. He also emphasized that the reauthorization will spur more investments, generate jobs, and promote skills development. Likewise, Secretary Pascual conveyed the country’s desire to establish a Free Trade Agreement (FTA) with the United States, noting the vast trade and investment opportunities available between the two economies. With this, he also expressed gratitude to those who manifested support for the said trade agreement.

To facilitate investments and create a conducive, transparent, and enabling business environment, Secretary Pascual emphasized the major economic reforms that the Philippines has introduced such as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, amendments to the Foreign Investment Act (FIA), Retail Trade Liberalization Act (RTLA), Public Service Act (PSA), and the approval of the 2022 Strategic Investment Priority Plan (SIPP).

The Trade Chief also mentioned that, “In support of industry development, tariffs on electric vehicles (EVs) were eliminated, current investment regimes on solar, wind, and tidal energy were liberalized, and the duty-free status of imported meat, rice, corn, and coal were extended to respond to global supply chain disruptions.”

Further, the Philippines’ participation in the Indo-Pacific Economic Framework (IPEF) was also discussed during the meeting where Secretary Pascual underscored, “Our participation in IPEF is significant as it is a mechanism that will offer tangible benefits which will further boost our economic recovery efforts such as more opportunities to cooperate on trade and investment. We are mainly interested in the areas of supply chain integration and strengthening crisis response.”

The US is a key trading partner of the Philippines. In 2022, the US was the country’s top export market and 5th largest import market. Relative to this, exports expanded by 5% in 2022 and imports grew by 15% from 2021. Meanwhile, also present in the meeting was DTI Assistant Secretary for Industry Development and Trade Policy Allan B. Gepty.

By Monsi A. Serrano

Despite the economic headwinds caused by the disruption of supply chains during the COVID-19 pandemic, and currently, the Russian-Ukraine war that resulted in another round of supply chain disruption, inflation and volatile prices of commodities, the European businesses and officials expressed confidence in the recovery and eventual growth of the Philippines economy.

This was tackled during the 2022 European Philippine Business Dialogue held at The Ascott Makati last November 14, spearheaded by the European Chamber of Commerce of the Philippines and co-organized by the British Chamber of Commerce of the Philippines.

Ambassadors from EU Member States Embassies, members of the diplomatic corps, foreign chambers, business leaders, government officials, and representatives from the private and public sectors attended the event.

With the theme, “New Era of Progress, Possibilities and Partnerships”, the European-Philippine Business Dialogue provided an open space for both the foreign investors and government officials who were present the real sentiment of the different European business leaders from various foreign chambers of commerce in the Philippines like Advantage Austria, French Chamber of Commerce and Industry in the Philippines, Dutch Chamber of Commerce in the Philippines, German-Philippine Chamber of Commerce and Industry, Spanish Chamber of Commerce in the Philippines, Nordic Chamber of Commerce of the Philippines and Swiss Chamber of Commerce of the Philippines.

European Chamber of Commerce of the Philippines Executive Director Florian Gottein underscored the importance of partnership between the stakeholders in the Philippines and the European businesses to explore possibilities that will lead to progress.

The ECCP Executive Director also expressed how the various game-changing economic reforms that have taken place will spur more direct foreign investments to the country once this is implemented through the IRRs. Gottein assured the government and other stakeholders that the EU biz group is willing to sit down and help in whatever capacity they can to ensure that the much-needed economic recovery that the Philippines aspires for will be achieved slowly and then lead to economic growth.

“The game changing economic reforms such as Public Service Act, Foreign Investment Act, and Retail Trade Liberalization Act, will increase foreign direct investments and create more jobs as multilateral agencies have expressed optimism about the Philippines in terms of growth,” he said.

“I think we’ll see 66 and a half percent GDP close in a given by the World Bank and the ADB benchmarking from the ASEAN region,” Gottein noted.

While the ECCP Executive Director shared the bullish outlook of European businesses and the chamber as a whole, he also revealed the inevitable hurdles that both Philippines and European businesses have to deal with.

“The Philippines has 7.6% growth in Q32022, surpassing acing the latest estimates on economic growth. It’s time to now build on this positive momentum and maximize the opportunities we have on the horizon in this beautiful country. There, however, remains some challenges across sectors and industries the team challenges such as infrastructure development, and human capital, among others.” he revealed.

Other issues tackled during the 2022 European-Philippine Business Dialogue was the GSP+ status of the Philippines given the recent assassination of broadcast journalist Percy Lapid and the outcry of the diplomatic community as this remains unsolved.

British Chamber of Commerce Philippines (BCCP) Executive Director and Trustee Chris Nelson, welcomed the signing of Republic Act No. 11659, the amended Public Service Act (PSA).

Speaking to THEPHILBIZNEWS, Nelson said, “The economic reforms is something that many foreign companies wish to happen soon because they see the potential of the Philippines in one of the investment hubs in the region.”

“There has been growing interest from UK companies doing business and investing in the Philippines. The signing of President Duterte is commendable and we also thank the congress and senate for making the necessary economic reforms to be realized. This will certainly entice many foreign investors as the business environment becomes conducive and not restrictive anymore,” he said.

Nelson believes the Philippines remains attractive for long-term investments. “Obviously we know the forecast growth for [Philippine economy wish is] about 7 to 9% and British companies can see the potential. And one thing I just want to emphasize about the UK, in particular, is the fact that [the British Chamber] obviously promotes the Philippines, not only as a market, that’s very viable for companies, but also an entry into Southeast Asia”, Nelson said. 

According to Nelson, he hopes the policies and measures pursued by the outgoing administration regarding opening up the economy to continue with the new administration taking over this coming national elections, “I think there’ll [next administration] be hoping to see that continuing, but our investors and the way we discuss with them is for the longer term and the potential of the Philippine market. Its 110 million people is growing. It’s dynamic. And of course the workforce. I mean, [the Philippines] has very many talented people and that’s a great attraction.” 

More importantly, Chris emphasized how the two remaining economic reforms namely, the Foreign Investment Act and New Retail Trade Law and the Philippines’ ratification of membership to the Regional Comprehensive Economic Partnership (RCEP)  would be vital contributors in boosting Philippine economic recovery in the post-pandemic era.

Furthermore, Nelson adds joining RCEP would mean favorable opportunities for the Philippines. “This will give the Philippines a great area in terms of trading. Now, there have been some concerns expressed, particularly through the agricultural sector, but in all fairness, the Department of Trade and Investment and the lead negotiator under Secretary Alan Gepty has addressed and covered the concerns raised, Nelson said. Besides RCEP, the Chamber is looking forward to the passage of the amendments to PSA very shortly, as it only awaits the President’s signature. 

As the country’s national elections draw near, policy continuity intended to further ease foreign ownership restrictions was identified to be crucial to sustain the Philippine economic outlook, as discussed during the recently held Philippine Macroeconomic Briefing hosted by the British Chamber of Commerce Philippines. 

Chris Nelson, BCCP Executive Director and Trustee and moderator of yesterday’s webinar asked Alvin Arogo, VP & Head of Research Division of Philippine National Bank on the potential impacts of the ongoing Ukraine-Russia crisis to the Philippine economy.

Among the key topics also discussed include the recent passage of amendments of the two priority economic reforms: the Retail Trade Liberalisation Act (RTLA) and Foreign Investment Act (FIA) which are now expected to drive additional entry of foreign direct investments (FDIs). 

More importantly, with the amendments of the RTLA and FIA successfully in place, the British Chamber is looking forward to the approval of the Public Service Act (PSA), a significant game-changer to the economy as described by the government and foreign business groups.

On 3rd February 2022, Congress ratified the bicameral conference committee report of the bill amending the PSA, shortly it was transmitted to the Malacañang and now currently awaiting for President Duterte’s approval. Moreover, Philippine ratification of its membership to Regional Comprehensive and Economic Partnership (RCEP) was also given a spotlight, emphasising the trade bloc could enhance competitiveness of the country’s local industries as well as the ability to attract FDIs.  

In a similar note, Arogo also shared his optimism in the Philippines’ bid for economic liberalisation by lowering foreign entry barriers. He said, “It’s been one of the roadblocks in getting firmer commitments from overseas firms to invest in the Philippines.” 

Briefly touching on the Philippines’ membership to RCEP, Arogo said that trade should be open to allow the country to enjoy growth in terms of efficiency and output.

As such, the Chamber remains at the forefront of key advocates for the Philippines’ economic liberalisation. The Chamber hopes that the next administration will continue the pursuit to open the economy, as this will aid in maintaining the positive outlook on the Philippine economy and its overall growth.

By Alithea De Jesus

With the lawmakers busy on the election campaign, the British Chamber of Commerce Philippines is looking forward to the swift approval of the two remaining priority economic reforms which are the amendments of Foreign Investment Act (FIA), Public Service Act (PSA) and also Senate’s ratification of the Philippine membership to Regional Comprehensive Economic and Partnership (RCEP). 

A staunch advocate to bring in more foreign investors to the Philippines, British Chamber of Commerce Philippines Executive Director and Trustee Chris Nelson has been very active in coordinating with various foreign chambers in the Philippines and also with the members of the British Chamber of Commerce in the Philippines. The foreign biz groups continue to think of how they can maximize the potential of the country and become the preferred investment hub in the region.

Just recently, Nelson welcomed the amendments to the PSA that allows 100 percent foreign ownership to key economic sectors such as telecommunications, airlines, railways and subways, domestic shipping, highways and airports. 

He also affirmed that PSA will be an important signal to foreign investors.  “It’s going to be a clear signal and I think it will increase competition. The PSA combined with the other two economic liberalization bills (RTLA and FIA) clearly indicates that the Philippines is opening up and will further attract foreign investment which has increased this year,” he said.

In an interview, when asked how the RCEP will help the Philippines, Nelson reiterated that it will be beneficial for the country to join the trading bloc. “It’s very important that the Philippines joins RCEP and obviously [we’re] confident that it will happen in May,” he said.

On the issue raised by the local agriculture groups, he recognised that DTI assured that it will benefit the local sector as well. “DTI particularly Assistant Secretary Allan Gepty has answered those points, there’s also advantages as well for the agricultural produce in terms of access to cheaper fertilisers and other products plus there will still be tariffs or controls on certain key products,” Nelson said. 

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As economic reforms advanced significantly, Nelson highlighted the Chamber’s role in promoting these changes in the UK. “When we talk about the role of the British Chamber we’re very keen to promote the opportunities of investing and trading in the Philippines as  a gateway to Southeast Asia.” 

On the British Chamber’s wishlist for the next administration, Nelson reiterated the need to enhance the country’s infrastructure even more and hopes that efforts to open the economy will still be pursued. “[For the] next administration, [measures] continuing to open up the economy,  developing the infrastructure, and moving further in terms of transparency and digitalisation which have all occurred under the current admin [should be maintained]”. 

Chris Nelson, BCCP Executive Director and Trustee would like to recognize the Bicameral panel co chaired by Congresswoman Sharon Garin and Senator Grace Poe for their commitment to reconcile the amendments on PSA before it adjourns its session on Friday. 

More importantly, the Chamber is now looking forward to the reconciled bill to be transmitted to Malacanang for President Duterte’s signature. 

Together with other local and foreign business groups, the British Chamber is at the forefront working hard and actively pushing for the passage of three priority bills including the Retail Trade Liberalisation Act (RTLA) and Foreign Investment Act (FIA). These measures will certainly contribute in helping the government’s goal to ensure the country’s post-pandemic recovery. 

By further easing foreign trade restrictions, the country will improve its global ranking in doing business and competitiveness. In relation to this, the Chamber is confident that the entry of foreign direct investments will further increase and the impacts of these measures will be significantly beneficial to Filipinos. 

With the promising impacts of these reforms, such as the potential job opportunities, technology transfer and greater competition in the market, the Philippines has now a more attractive and investment-friendly environment. 

Overall, as the Philippines is making significant advances liberalizing its economy, the British Chamber recognises the value presented by Regional Comprehensive Economic Partnership (RCEP). 

As the Senate nears to adjourn its session, we remain optimistic that Philippine membership to RCEP will be ratified soon. By joining the largest free-trade bloc, will further complement the government’s initiatives to make the country more attractive to foreign investments. 

By Victoria “NIKE” De Dios

After working hard to push the much needed economic reforms in the country for the past years such as the Retail Trade Liberalisation Act (RTLA), Foreign Investment Act (FIA) and Public Service Act (PSA), Chris Nelson, Executive Director and Trustee of the British Chamber of Commerce Philippines urges the Senate to ratify Philippine membership to Regional Comprehensive Economic Partnership (RCEP) complementing the government’s push to attract foreign investments. 

In his latest interview, Nelson underscored that the Philippines need to join the largest trading bloc now which covers 30 percent of the world’s population and global economy.

“I think this is the time to join, the key here is to give tremendous access to Philippines industries,” Nelson said. At the same time, he also recognized that some members of the local agriculture sector expressed their concerns about the adverse effect of RCEP in the agribusiness sector, but Nelson stressed that DTI had already fully responded to the growing concerns. 

When asked about the possibility of Philippine businesses losing out, Nelson is optimistic the Philippines can compete. He stressed that “[Philippines] can compete very well and the benefits of a wider economy market will be much more beneficial”. Furthermore, membership to RCEP could renew growth in foreign investments which the Chamber has been strongly advocating for supporting the Philippines’ recovery. 

Currently, the Philippine government is strengthening its local industries by pursuing structural policies attracting foreign participation in key sectors. 

With the recent passage of tax reforms and amendments to the retail trade law under the Duterte administration, the country is certainly making significant advances towards opening up its economy. However, before the Congress adjourns its session next month, the British Chamber expects urgent approval on the remaining priority bills amending the Foreign Investment Act and Public Service Act ensuring long term economic growth prospects. 

By Victoria “NIKE” De Dios

With the Regional Comprehensive Economic Partnership now in the Senate for ratification, the British Chamber of Commerce Philippines is urging the upper chamber of the legislature to ratify Philippine membership to Regional Comprehensive Economic Partnership (RCEP) before Congress adjourns for the upcoming election.

As the country continues to emerge from the impacts of the pandemic, Chris Nelson, BCCP Executive Director and Trustee is optimistic with Philippines’ post-pandemic recovery. Nelson appreciates the significant measures done by the government to bolster economic growth by easing COVID restrictions, accelerating the vaccine rollout and more importantly, certifying as urgent the enactment of economic reforms such as the amendments on Retail Trade Liberalisation Act (RTLA), Foreign Investment Act (FIA) and Public Service Act (PSA). 

However, Nelson is looking forward to seeing further measures done to open up the economy highlighting the swift passage of amendments to PSA, FIA and the Philippine membership to RCEP. 

To further seek foreign investments a more relaxed and competitive business environment must be in place.

Nelson also agrees with DTI Secretary Ramon Lopez in his previous statement that any delay in ratification of RCEP could impede the creation of mass employment opportunities crucial to bounce back from the pandemic. 

Given the high level of competition to attract foreign investments among ASEAN countries, the British Chamber strongly urges that Congress need to act quickly by approving the priority bills and further easing the covid restriction to renew interest and growth in FDIs. 

With the additional economic measures in place, the British Chamber is eager to continue to further promote the Philippines competitive investment climate, business opportunities and positive long-term fundamentals. 

Recently, the Bangko Sentral ng Pilipinas reported Philippines’ FDI net inflows rose by 98.9 percent growth year-on-year in October 2021 to US$855 million from the US$430 million net inflows in the same month in 2020. 

By THEPHILBIZNEWS STAFF

British Chamber of Commerce Philippines welcomed the recent signing of Republic Act (RA) No. 11595, amending RA No. 8762, or the Retail Trade Liberalization Act of 2000.

Having been at the forefront in pushing for the economic reforms in the Philippines, the British Chamber believed that the amendment of the following economic reforms of Retail Trade Liberalization Act, Foreign Investment Act and Public Service Act will spur more investments to the country.

Since April 2021, President Rodrigo Duterte certified the urgency to enact the reforms and urged Congress once again, to fast track the three bills during his last State of the Nation Address. During the remaining months of 2021, British Chamber Executive Director and Trustee Chris Nelson consistently called upon the Congress to swiftly approve the said economic reforms. 

With the recent signing of Republic Act (RA) No. 11595, amending RA No. 8762, or the Retail Trade Liberalization Act of 2000, the British Chamber welcomes the move creating a more conducive investment environment, fostering increased competition and creation of additional job opportunities. In this regard,we would like to commend the Congress and the administration key economic managers for their commitment to restart the economy, deliver high and inclusive growth through international trade and cooperation. 

The British Chamber strongly believes to fully unlock the potential of the country, easing foreign restrictions is a must to spur economic growth and recovery in the post-pandemic era. With the latest enactment of the reform, we are confident more UK retailers will be attracted to the Philippine market. 

On the way forward, the Chamber is eager to extensively promote the lowered minimum paid-up capital in the UK alongside the UK Department for International Trade in Manila and the British Embassy Manila. Interests and enquiries from UK-led retailers is expected to increase. Previously in 2021, the BCCP received over 160 enquiries from UK companies considering doing business in the Philippines. 

Although the British Chamber is encouraged by this progress, a need to dismantle remaining barriers for foreign investments still exists. In this manner, the passage of Foreign Investment Act and Public Service Act will surely complement the ongoing efforts to open up the economy for foreign investors.