Govt cheers P110-b foreign investments

The Finance Department said the recent decision of two foreign companies to invest P110 billion in local companies reflects a vote of coincidence in the Duterte administration.

Finance Secretary Carlos Dominguez III said in a statement the move by Macquarie Infrastructure Management (Asia) Pty. Ltd. and Arran Investments to pump P65 billion into the Philippine energy sector was a vote of trust and confidence by foreign investors in the Duterte administration and its socioeconomic reform agenda anchored on high and inclusive growth.

A consortium of investors comprising funds managed by Macquarie Infrastructure Management and Arran Investments formed Philippines Renewable Energy Holdings Corp. and offered to acquire up to 31.7 percent of Energy Development Corp., a renewable power producer, for $1.3 billion or about P65 billion.

Finance Secretary Carlos Dominguez III
Macquarie Infrastructure Management is a member of Macquarie Infrastructure and Real Assets, one of the world’s largest infrastructure asset managers. Arran, meanwhile, is an affiliate of the GIC Pte. Ltd., which manages Singapore’s Sovereign Wealth Fund.

The consortium plans to buy 6.6 billion to 8.9 billion common shares of EDC, mostly from minority shareholders, at P7.25 per share, or a maximum total price of P64.525 billion ($1.28 billion). The tender offer is expected to close on Sept. 18.

Dominguez said that along with the P45-billion investment of Japan Tobacco International, following its acquisition of Mighty Corp., the total foreign direct investment from these two sectors alone would reach P110 billion.

“The credit goes to President Duterte who inspires trust and confidence in the Philippines,” Dominguez said.

JTI, which is partly owned by the Japanese government, sealed a deal to acquire cigarette manufacturer Mighty Corp. for P45 billion, of which P25 billion would be paid to the government to settle Mighty’s tax liabilities. 

Dominguez said the value-added tax on the JTI-Mighty deal would bring in an additional P5 billion for the government, which means total tax haul for the Bureau of Internal Revenue would amount to P30 billion.

Mighty, through JTI, already remitted to the BIR P3.44 billion on July 20, representing the initial tranche of its tax settlement.

The remainder of the settlement would be paid to the government upon the approval by the Philippine Competition Commission of JTI’s acquisition of Mighty.

Topics: Department of Finance , foreign investments , Finance Secretary Carlos Dominguez III
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