The 27-member states ofthe European Union (EU)has urged the Duterte administration to open up the economy further, even suggesting to be bolder by amending the Constitution, to take advantage of the current situation where more companies are relocating from China to southeast Asia.
In a webinar hosted by the German Philippine Chamber of Commerce and Industry (GPCCI) on"European Chambers Talk to EU Delegation: #Together we are Europe and the Philippines" to mark the Europe Day Celebration, EU businessmen and officials of the EU Delegation to the Philippines urged the Philippines to take advantage of the exodus of investors out of China.
"We have to bring the necessary reforms to make the Philippines more profitable not just to Filipino firms but to foreign companies, some of them have been looking into investing in the country but are in doubt to invest or not, "stressed Maurizio Cellini, head of the trade and economic affairs of the EU Delegation to the Philippines.
Cellini said the reform in the Public Service Act is a key element to open the economy to foreign direct investments (FDIs).
He urged the government to be even "bolder," he said, by considering the revision of the Constitution, which limits economic activities of foreign companies.
"We understand this is a complex matter and a long term process, "the chief EU Delegation economist said, but stressed that amending the Constitution is the best way to allow foreign firms and EU companies to be more active in the Philippines.
"It is not easy, it will take time but this is the way the country should follow in the medium and long term to improve its attractiveness as a destination of FDI," he stressed.
Making the country competitive is essential as he also agreed that the general situation particularly in southeast Asia is "very much fluid with lots of movement, lots of uncertainty, reassessments and a lots of companies trying to relocate from China to other regions and the Philippines could be one to benefit."
However, under the current business environment, he doubted that the Philippines is in a strong position to take advantage of the situation as he noted of the aggressive positioning of Vietnam and other countries in southeast Asia to welcome foreign direct investments.
If the new CREATE bill will be adopted swiftly, he said, it would be able to help and support the position of the Philippines as a destination for FDI, which had avoided the country for the past two to three years at a progressive decline.
European Chamber of Commerce of the Philippines President Nabil Francis said that reducing the corporate income tax (CIT) to 25 is a good step, but he also raised doubt if the CIT is sufficient enough considering that "competition among ASEAN countries is fierce."
"Fast-track the Public Service and Retail Trade Act reforms to open access to for players, pass the create bill with CIT. These are going to the right direction," he urged.
Francis cited bureaucracy, lack of infrastructure, and market restrictions as reasons for the declining FDIs stressing the Philippines is seen as largely restrictive to foreign equity.
To ensure these outsourcing firms stay in the country, he urged the government to "act decisively in order to bring new measures."
Cellini expressed hope that this global health emergency would help authorities to streamline to "make the country a more attractive place to do business which is not, so far, until now."
Specific sectors that EU firms would be interested in the country are infrastructure leveraging its digital technologies, manufacturing, logistics and retail to maximize benefits when consumer confidence picks up again.
Cellini also urged the Philippines to consider the use of EU Philippines Partnership and Cooperation Agreement (PCA) and the trade andinvestment subcommittee as a venue for government to government discussion for trade and investment and as a new institution before end this year. At present, the EU-GSP is the major cornerstone of traderelation ships of both countries.
"We hope that in spite of delays due to the COVID emergency, the Philippines and EU would beable to set up the subcommittee on economic and trade affairs and develop it as a core body for discussion conceptualization of increased cooperation in trade and investment between two countries," he added.
For his part, Thomas Wersing, charge 'd affaires of the EU Delegation to the Philippines, vowed of continuing implementation of cooperation projects already in place in the country.
He said noting that more than 80 million euros would not be all for Bangsamoro Autonomous Region in Muslim Mindanao, which a priority area for EU.
By Bernie Cahiles-Magkilat
Source: Business Bulletin, Manila Bulletin