Envoy eyes more US firms to locate in Philippines

Philippine Ambassador to the United States Jose Manuel Romualdez is inviting more American business owners and investors to do business in the Philippines, citing the country’s economic resilience amid the Covid-19 pandemic.

In a virtual business forum hosted by the Philippine Economic Zone Authority on Tuesday, Jan. 18, 2022, Romualdez said the Philippines has been showing good signs of recovery with an expected gross domestic product growth of 5.1 percent, more than the target of four to five percent in 2021.

He attributed the recovery to the increasing vaccination rate of the country that allowed the gradual reopening of the economy in the third and fourth quarters of last year.

“The country’s economy has been up and running,” he said, noting that the digital economy has kept most businesses afloat, especially at the height of the pandemic.

He said there are also good indicators that e-commerce will continue to grow and with this growth comes the opportunity for investors in the country.

“It is now an opportune time for the Philippines and the United States to engage in more economic partnerships with the participation of both countries’ dynamic business communities,” he said.

The US and the Philippines celebrated last year the 75th anniversary of diplomatic relations.

There are over 400 American companies operating in the special economic zones across the country with a total investment of more than US$3.4 billion mostly from industries such as business process management, call center operations, software development and the exports of machinery, electrical and information technology-related equipment.

Amid the changing business environment and new priorities of the US toward climate change and other new areas in infrastructure, Romualdez said the Philippines should be ready to take advantage of opportunities in the areas of supply chain resilience, technology and advancements, artificial intelligence and cybersecurity.

“Given these changing times and emerging global trends, there is a need to quickly respond to the changes for the country not to be left behind,” he said.

Romualdez believes the Philippines is ready to do more business with the US given their “aligned priorities,” including the transition from coal to other alternative sources of energy and the participation in green metals such as nickel, copper and cobalt.

He also mentioned new laws in the Philippines that make the country friendlier to foreign investors.

In December 2021, President Rodrigo Duterte signed into law a measure that would further open up the Philippine retail sector to more foreign retail businesses by lowering their required paid-up capital. Duterte signed Republic Act (RA) 11595, which amends RA 8762, also known as the Retail Liberalization Act of 2000.

The newly signed RA 11595 lowers the paid-up capital requirement in retail trade to P25 million from its previous limit of $2.5 million or roughly P125 million.

The law also relaxes the restrictions in foreign investments by removing investment categories and setting an across-the-board minimum paid up capital investment equivalent to P25 million.

This amended retail law is expected to hasten the economic recovery of the Philippines. Its principal author, Sen. Franklin Drilon, said it will boost the country’s chance to return to pre-pandemic economic growth levels.