The Philippine Economic Zone Authority (PEZA) is wooing more than 4,0000 Taiwanese companies to invest in the Philippines through the “China Plus One” (C+1) strategy.
C+1 refers to a business strategy adopted by companies, especially multinational corporations, to diversify their production and supply chain activities by adding an alternative manufacturing or sourcing location to China.
“As an FDI [foreign direct investment] attraction strategy, the Philippines can leverage on the C+1 policy to entice more than 4,000 Taiwanese companies and other MNCs [multi-national companies] with manufacturing facilities in China that are looking for redundant sites in ASEAN and as part of their de-risking global value chains,” said PEZA director-general Tereso Panga.
PEZA identified Taiwan as a priority market for outbound investment missions for 2024, drawing support from existing bilateral investment agreements and the New Southbound Trade Treaty between the two countries.
“We will strengthen further our collaboration with the Philippine Trade and Investment, Manila Economic and Cultural Office, Taiwan Economic and Cultural Office and the Taiwanese Chamber of Commerce for the conduct of investment and trade promotions to be able to attract more FDIs from Taiwan and increase its share in the economic zone investments and exports of goods and services,” Panga said.
He said the Philippines would benefit from an increased economic cooperation with Taiwan, given the latter’s status as the seventh largest economy in Asia and 20th largest in the world in terms of purchasing power parity.
The Philippines will also benefit from Taiwan’s competitive manufacturing sector in electronics, machinery, petrochemicals, energy and ICT products, said Panga.
PEZA said it aims to attract strategic and high-tech industries from Taiwan that enable economic zone product sophistication, export diversification, labor-intensive and high-skilled jobs, knowledge transfer, enhanced local supply chain and creation of industry clusters.
Panga said the two-hour travel distance between the Philippines and Taiwan makes sense for Taiwanese companies to first consider the Philippines if they decide for offshore operations.
“This is where the Taiwanese investors can capitalize on our huge labor pool which are young, English proficient and highly skilled. Among the benefits of locating in the Philippines in the economic zones is our GSP+ [Generalized System of Preferences Plus] privileges. So, if you’re exporting out to the Philippines to Europe, you enjoy zero duty on your exports. It’s only available for the Philippines across ASEAN because of our free trade agreements,” Panga said.
Data from PEZA showed that of more than 422 economic zones in the Philippines, 80 were hosting manufacturing activities.
PEZA expressed optimism that it would register over P170 billion in new investments in 2023.
