Top executives of major Taiwanese manufacturing firms vowed to continue choosing the Philippines for their regional expansion plans.
At the virtual Philippine Investment Forum in Taipei, co-organized by the Philippine Trade & Investment Center (PTIC) in Taipei and the Manila Economic and Cultural Office (MECO) on April 15, 2020, Taiwanese executives, decision-makers, and business leaders said they are seriously looking to expand their business operations .
The forum was highlighted by a discussion by Philippine government officials on the key features of the recently-enacted Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, a hallmark in Philippine legislation which lowers the country’s corporate income tax (CIT) rate and modernizes the country’s investment incentives that are competitive, transparent, time-bound, targeted, and performance-based.
James Wang, CEO of SERCOMM, a global leader in the manufacture of telecommunications and broadband equipment, shared how they were able to scale their operations from just a little over a year ago.
SERCOMM currently employs more than 2,000 Filipinos in the country and has a leading market share for their product segments in the US market.
“We are very proud to have achieved the production milestone in such a short time, especially during this unprecedented time. Sercomm Philippines has become a crucial portion of Sercomm’s global operations. We plan to continuously expand our operations to support future business growth in the local and global markets” said Wang.
Chairman Patrick Chiu of Hocheng Philippines Corporation which has been operating a major manufacturing hub in the Philippines for over 25 years since 1995, meanwhile shared that the company has steadily grown its business in the Philippines enjoying a 55 percent current market share. HCG now enjoys the distinction as the No. 1 total bathroom solutions provider in the Philippines.
Chiu, in his testimonial keynote, shared his company’s experiences and successes in the Philippine market and how they are quickly able to address challenges brought about by the pandemic.
Kevan Tsai, Director of Taiwan Electrical and Electronic Manufacturers’ Association’s (TEEMA) New Southbound Project Team and serves in the newly formed and very important New Southbound-Taiwan ICT Links Committee, said the group has chosen the Philippines as among the top destinations for their regional expansion programs.
During the forum, Philippine Trade and Industry Undersecretary and Board of Investments (BOI) Managing Head Ceferino Rodolfo discussed the key features of the CREATE Law and how Taiwanese companies can take full advantage of the landmark legislation.
“The new law provides the government with flexibility to grant fiscal and non-fiscal incentives for high-value strategic investments including the longer period for enjoying income tax holiday (ITH) and tax subsidies for key cost items,” Rodolfo said.
The CREATE Act lowers the current corporate income tax rate from 30 percent to 25 percent for large corporations and 20 percent for small businesses. The law effectively overhauls and updates the tax and fiscal incentives and will be granted on a strategic, targeted performance-based, and time-bound basis.
“The new law is expected to make the Philippines a highly viable and more competitive choice for companies that are exploring for their next investment destination and manufacturing hub in Southeast Asia,” Rodolfo said.
“We expect more manufacturing companies to follow suit, especially with the positive experiences and successes of established Taiwanese companies successfully operating in the Philippines,” said Rodolfo, noting that President Rodrigo Duterte also certified as urgent, three major bills that are seen to further improve the business climate and make the Philippines a more attractive business destination namely: amendments to the Public Service Act, the Foreign Investments Act, and the Retail Trade Liberalization Act. Rodolfo also mentioned that the President recently issued an Executive Order lifting the ban on new mining agreements.
Meanwhile, MECO Chairman and Resident Representative Angelito Banayo in his welcome remarks and opening keynote cited Taiwan’s economic performance.
Banayo lauded Taiwan’s handling of the ongoing health crisis, thus managing to overcome the challenges and even growing their economy by 3.11 percent. Taiwan is also expected to grow at 4.64 percent this year.
“I believe greater cooperation and partnership with Taiwan’s businesses would be a good platform to launch a comeback as the pandemic hopefully subsides,” said Banayo as he urged Taiwanese business community, particularly in the fields of manufacturing, infrastructure investments, and information communications technology to choose the Philippines for their expansion program.