President Marcos, in a meeting with Canadian Minister of Export Promotion, International Trade, and Economic Development Mary Ng, has pitched the Philippines as an attractive business hub, underscoring the country’s ambition to become a leading investment destination.
To make this vision a reality, the Philippines must implement strategic measures to enhance its business environment and attract Canadian businessmen and other foreign investors.
One of the significant steps the country has already taken to improve its investment climate is the signing of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, which amended CREATE Act to further ease doing business in the Philippines. This landmark law is a crucial part of the government’s strategy to ease the burden on businesses and attract foreign investment. By lowering the corporate income tax rate from 25 percent to 20 percent, the law signals the government’s intention to make the Philippines a competitive player in the region. It also introduced incentives for businesses that engage in strategic activities, offering tax breaks and other privileges to industries such as energy, manufacturing, IT, and tourism. For instance, CREATE MORE also increased the deductions for power expenses from 50 percent to 100 percent.
The signing of the CREATE MORE Act is a step in the right direction. However, additional efforts are necessary to solidify the country’s position as a business-friendly and investment-ready nation.
The passage and the eventual signing of the proposed Green Lane for Strategic Investments Act, which has already hurdled the House Ways and Means Committee, is crucial. This proposed legislation seeks to expedite the processing of permits and licenses for strategic investments, ensuring that high-value projects receive timely approvals. By establishing dedicated “green lanes” in government agencies, the Philippines can significantly reduce delays and enhance investor confidence.
Strengthening digital infrastructure is another vital step to enhance the potential of the country as an investment hub. A robust digital infrastructure is essential to support modern business operations. Enhancing internet connectivity and digital services will facilitate smoother transactions and communication for both local and foreign businesses.
Improving transparency and governance is another crucial measure. Ensuring transparency in government dealings and minimizing corruption are vital to creating a trustworthy business environment. Implementing stringent anti-corruption measures and promoting good governance will attract more investors.
Beyond legislative reforms, the Philippines can offer various incentives to attract foreign investors.
Providing tax breaks, reduced tariffs, and other fiscal incentives can make the Philippines more appealing to foreign businesses. These incentives should be targeted at sectors with high growth potential and strategic importance.
Expanding and enhancing special economic zones (SEZs) can provide businesses with favorable conditions, such as tax exemptions and simplified customs procedures. SEZs can serve as hubs for innovation and industrial growth.
While the country has a skilled workforce, investing in education and vocational training programs will further develop this and ensure a steady supply of skilled labor. A well-trained workforce is a significant draw for companies looking to establish operations in the country.
For Canadian investors in particular, the Trade Commissioner Service of Canada has identified agriculture and processed foods, defense and security, education, information and communications technologies, infrastructure, mining, and sustainable technologies as sectors in the Philippines where they have greatest opportunities.
To realize the Philippines’ goal of becoming a premier investment hub, it must continue to implement reforms that enhance ease of doing business, offer attractive incentives, and foster a transparent and efficient government. By leveraging its strategic location, skilled workforce, and growing economy, the Philippines can attract significant foreign investments, Canadian businesses included. With targeted efforts and strategic partnerships, the Philippines can transform its investment landscape and achieve sustainable economic growth.