Finance Secretary Ralph Recto urged British investors to consider expanding their financial integration with the Philippines as the country will join JP Morgan’s Bond Index soon.
“This is expected to boost investor interest in Philippine government bonds, potentially lowering borrowing costs and improving market liquidity,” Recto said in a keynote address at the Philippine Economic Briefing (PEB) in London on Oct. 31, 2024.
The PEB in London served as a platform to highlight the Philippine government’s current initiatives to further improve the ease of doing business and fast-track economic progress.
He said the Euro market has been a vital source of financing for the Philippines.
Recto said among the strategic investment advantages of the Philippines is its vibrant labor force with a young, well-educated and English-speaking workforce.
“If there is one country that can stand witness to the best that the Philippines can give the world, it is most probably the United Kingdom. The presence of around 250,000 Filipinos here in the UK today is a testament to this, with more or less a fifth of them providing critical services to the British healthcare system,” he said.
With the new Public-Private Partnership (PPP) Code, Recto encouraged business leaders to submit unsolicited proposals, respond to solicited ones or explore more joint ventures with the Philippines on its 186 flagship infrastructure projects.
Recto said with the Philippine Digital Infrastructure Project and the National Broadband Program in place, the Philippines is ready to become the hotspot for the UK’s technology-driven businesses such as hyper-scale data centers.
He said to fuel this digital transformation, the Philippine government developed an artificial ontelligence roadmap and strategy to upskill and retool the Filipino workforce.
Recto said to facilitate British investors’ swift entry into the Luzon Economic Corridor, the government would soon enact new amendments to the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE).
“This policy is specifically designed to address your concerns and tailor fiscal and non-fiscal incentives to meet your specific needs,” he told investors.
The CREATE MORE bill further streamlines business compliance by reducing documentary requirements, and resolves value-added tax (VAT) concerns by exempting export-oriented enterprises from paying the latter.
It also offers a very competitive incentive package for projects with investment capital exceeding GBP 199.67 million (P15 billion).
Meanwhile, registered business enterprises benefit from a reduced corporate income tax rate of 20 percent. The maximum duration of tax incentives availment will be extended from 17 years to 27 years. Incentives for labor-intensive projects can even be extended for another decade.
Registered business enterprises will also benefit from the 200-percent deduction on power expenses and an additional 50-percent reduction for reinvestment allowances on priority tourism projects or activities.
Recto also told investors to watch for a proposal to reduce the tax on stock transactions from 0.6 percent to just 0.1 percent, which would lower friction costs and align the Philippines with its regional peers.
“It has been long proven: just give Filipinos the opportunity and watch them deliver their best. So I am urging you to bet on us. Make the wise decision to invest in the Philippines. And we will deliver,” he said.
For the first time in five years, the UK is the Philippines’ number one source of foreign direct investment (FDI) inflows, with GBP 585.74 million (P44.13 billion) worth of investments to the Philippines as of end-July 2024––or 4,230-percent higher than the previous year’s.
The UK is also the country’s eighth-largest source of tourist arrivals; the fifth-biggest source of overseas Filipino remittances; and 21st largest trading partner of the Philippines.
