Chinese steel conglomerate Panhua Group is asking the government for better lease terms on a 300-hectare property within the Phividec Industrial Estate in Misamis Oriental for a proposed $3.5-billion integrated steel manufacturing plant.
Philippine Economic Zone Authority director-general Charito Plaza said Panhua was one of the Chinese companies seeking to relocate to the Philippines to escape the high tariff imposed by the US on China-made products.
Plaza said locators in China and Vietnam were enjoying incentives such as low lease for the first 25 years on top of affordable power cost and other subsidies.
She said to make up for the high power rates in the Philippines, Panhua was asking for lower rental rates.
Peza already reduced Panhua’s rent to P40 per square meter from P150, but the Chinese firm wanted further reduction.
Panhua proposed to produce ten types of steel products in its Mindanao plant for the local and export markets.
Plaza said Peza was also reviewing the proposals of three Chinese investors who were interested to relocate to the Philippines.
“This is due in part to the trade war between China and the US with soaring tariffs for products traded between these nations,” she said.
Peza expressed concern that the proposed Tax Reform for Attracting Better and High Quality Opportunities, or Trabaho bill, might affect the companies’ desire to relocate to the Philippines.
She said the Trabaho bill would dramatically alter the current set of incentives given to foreign investors.