The Philippines is working on renewing the preferential trade agreement with the US as a step toward pursuing the Philippine-US Free Trade Agreement.
Trade Secretary Ramon Lopez said during the third virtual economic briefing organized by the Philippine Embassy in Washington D.C. the Philippines was keen on continuing the US Generalized System of Preferences and having a free trade agreement with the world’s largest economy.
“We are grateful for the GSP program that the US has provided the Philippines. The next step, really, is how we can elevate it into an FTA so that it becomes a longer, lasting kind of trade arrangement,” he said.
“We believe that the current effort on this bilateral strategic dialog is a step in the way, and the trade and investment framework agreement would be the steps that we could take in order that it can lead us to an FTA, a much stronger trade relationship,” he said.
Lopez told US participants the Philippines is prepared to hold discussions both on the GSP renewal and the FTA. The Philippines is enjoying a good GSP program with the United States that has been a big help to many of the marginalized sectors in the Philippines, “for which the Philippines is truly grateful”, he said.
“A lot of exporters and other micro SMEs who have been part of the global value chain have started to enjoy exporting products like canned tuna, marine products, seaweeds, coconut-based products, which as you know have graduated into more high value-added coconut products and electronics, among others,” Lopez said.
Finance Secretary Carlos Dominguez III told American investors in the same briefing that now is the best time to do business in the Philippines, as the economy recovers from the devastating impact of the COVID-19 and is reinforced by a fresh set of economic liberalization measures to lure more investments.
“Now is the best time to do business in the Philippines… This year, we are well on our way to returning to normal with the Philippine economy expected to expand further between 7 and 9 percent,” Dominguez told about 200 American business leaders and policymakers gathered via teleconferencing for the virtual briefing.
“Our economy is recovering rapidly. In the last quarter of 2021, our GDP grew by 7.7 percent, making the country’s expansion the highest in the ASEAN (Association of Southeast Asian Nations) region and among our credit rating peers globally,” Dominguez said.
Dominguez said the recent enactment of the amendatory bill to the Retail Trade Liberalization Act, along with the Congress-approved amendments to the Public Service Act and Foreign Investments Act that will soon be signed into law by President Duterte, complete the set of economic reform initiatives that make the Philippines’ a premier investment destination in the region.
“These three forward-looking measures widen the horizon for investments. They create numerous opportunities for synergy between local and international firms. There is now enough space for international firms to form joint ventures with Filipino companies, especially those at the cutting edge of information technologies,” Dominguez said.
Dominguez urged American investors to establish or expand their retail trade operations in the Philippines, now that the new RTLA lowered the minimum paid-up capital requirement for foreign corporations from $2.5 million to about $500,000.
Foreign retailers who want to open more than one physical store can now expand through a lower minimum investment of $200,000 per store, compared to the previous requirement of $830,000 per store, he said.
The law also simplified the qualification requirements of foreign retailers by removing the required net worth, the number of retailing branches, and retailing track record conditions.
Dominguez said experienced and strategic investors from the United States could bring in their capital to the Philippines to invest in the fields of telecommunications, media, and private transportation vehicles once the PSA is enacted.
Under the amended PSA, public services will be open to 100-percent foreign ownership, while retaining public utilities as majority-owned by Filipinos, subject to the 60-40 ownership rule under the Constitution.
The list of public utilities will be limited to distribution and transmission of electricity; water pipeline distribution system, wastewater, and sewerage pipeline systems; petroleum and petroleum products pipeline transmission systems; seaports; and public utility vehicles under the amended PSA.
“I invite you to look closely at the Philippine economy in the light of the pro-business policies instituted over the last five and a half years. The Philippines is a growth leader in the region and a reliable host for international partnerships,” Dominguez said. With Julito G. Rada