MTD Philippines, a fully owned subsidiary of Malaysia’s top engineering conglomerate MTD Capital, has announced it is investing P12 billion over the next six years in the country.
Patrick Nicholas David, president and CEO of MTD Philippines Inc. and chairman of Bandar Hebat Builders Inc. (BHBI), divulged the company’s additional investments in the country at the Global Biz With PEZA “Strengthening Southeast Asia Cooperation thru Philippines-Malaysia Ecozone Development and Business Continuity Forum”.
“Since 15 years ago to date, MTD has invested or about 4 billion Ringgit equivalent to about $1 billion. For the coming six years, MTD has programmed to invest another P12 billion, or about a billion Ringgit,” said David.
At the webinar, David shared that their investment was made possible with the tax perks granted by the Philippine Economic Zone Authority (PEZA).
Some of the MTD projects are located in Clark Freeport Zone. It could be recalled that MTD entered into a joint venture with the state-owned Bases Conversion Development Authority for the development of the national government administrative center, which was inspired by Putrajaya Malaysia, a masterplanned government center outside of Kuala Lumpur.
MTD also constructed the sports facility used during the 30th ASEAN games in 2019 that it completed in under 18 months.
The project is located in Clark Special Economic Zone at the New Clark City. As a PEZA-registered project, MTD was granted fiscal incentives including four year income tax holiday, tax and duty-free importation of machinery equipment, tools and goods directly used and registered for their operations.
It was also granted zero value added tax on local purchases, and exemption from payments of any and all new government taxes and licenses, except real estate tax.
In lieu of regular corporate income taxes of around 25 percent after the four years income tax holiday, it is entitled to 5 percent gross income tax.
It was also allowed to employ foreign nationals. As PEZA-registered company, MTD enjoyed simplified import and export procedures.
“We sincerely thank and salute PEZA headed by Director General, Brigadier General Charito Plaza for the incentives our company is currently enjoying,” said David.
Meanwhile, the Department of Trade and Industry reported that five major investments from Malaysia in the country already reached $1.66 billion.
At the virtual “Make it Happen Philippines: The Philippine Investment Forum 2021” which featured the second Philippine Investment Forum for Malaysia,
Philippine Ambassador to Malaysia Charles C. Jose said that the five Malaysian projects were registered with various investment promotion agencies of the government from 2018 to 2020.
For his part, DTI Secretary Ramon M. Lopez cited strong appetite among Malaysian companies to invest or expand their current businesses in the Philippines despite the pandemic.
“Malaysia remains to be the top trading partner and investment source of the Philippines,” said Lopez.
In 2020, Malaysia ranked as the 10th trading partner of the Philippines, with balance of trade in the favor of Malaysia.
In terms of investment, Lopez said Malaysia was the 12th source of IPA-approved investments, registering a growth of 43.90 percent from previous year. And this year, January to June, Malaysia placed as the 6th source of FDI for the Philippines.
He urged Malaysian firms to invest in priority sectors the government has identified specifically for Malaysia. These are manufacturing (semiconductor and electronics, food and beverage); agribusiness (upstream and downstream industries, such as value-added processing and manufacturing of agricultural products); services (high value and value-added services, especially in IT-BPM); infrastructure projects, property development, and construction services; and energy (especially renewable energy).
Recognizing Malaysia as a global Halal hub, Lopez also encouraged Malaysian firms from food and beverage companies to Islamic banks to explore opportunities in the Philippines considering there are an estimated 12 million Muslim population in the country.
In fact, DTI said that an investment from Malaysia worth $130 million, covering some of the priority sectors, have been recently committed.