Malacanang on Friday announced that the Philippines has secured $4.26 billion worth of investments from four agreements in Saudi Arabia.
President Ferdinand Marcos Jr., who is in Riyadh to attend the ASEAN-GCC Summit there, said the agreements were reached at a meeting with Saudi business leaders a day before the summit began.
Topping the four agreements is the $3.76 billion deal between Al-Jeer Human Resources Co. (ARCO) and the Association of Philippine Licensed Agencies for the Kingdom of Saudi Arabia to cooperate to employ Filipino workers in the kingdom.
Al Rushaid Petroleum Investment Co. and Samsung Engineering NEC Co. Ltd., meanwhile, reached a $120 million agreement with EEI Corp. for the establishment of a 500-person training facility in Tanza, Cavite, Philippines.
Meant to upgrade Filipino labor skills in masonry, carpentry, electrical, welding, equipment management, warehousing, steel fabrication, and other construction-related crafts, it aims to train at least 2,000 Filipinos starting in 2024 and more than 15,000 in the next five years.
Maharah Human Resources Co. of Saudi Arabia reached separate agreements with Filipino firms Staffhouse International Resources Corp. and E-GMP International Corp., each valued at an estimated $191 million.
Both agreements seek to bring thousands of Filipino workers to the Kingdom to meet its growing demand for labor.
President Marcos said his meeting with Saudi business leaders comes at a time when the Philippine economy is on a “high growth trajectory.”
“Our economy has sustained its growth momentum, with gross domestic product at 7.6 percent in the last year, the fastest rate of growth recorded by the Philippines since 1976,” the President said.
President Marcos said he is looking forward to building “greater and closer” partnerships with Saudi Arabia, given that it is home to “the largest population of overseas Filipinos in the world.”
Saudi Arabia is home to about 1 million overseas Filipino workers (OFWs), as well as the largest community of Filipino professionals in such industries as engineering, architecture, and health care.
The President invited Saudi business leaders to visit the Philippines and see for themselves the investment opportunities that the country has to offer.
Speaker Martin Romualdez on Friday congratulated the President for securing the four landmark agreements.
President Marcos witnessed the signing of the four agreements towards the culmination of his meeting with Saudi business leaders Thursday afternoon at the Regis Hotel in Riyadh.
The Palace also said Saudi business leaders expressed their interest in the Maharlika Investment Fund (MIF), as the President urged them to invest in the country’s first sovereign investment fund aimed at driving long-term economic development through increased investments in high-impact projects.
“We look forward to benefiting not just from Saudi investments, but also from the Kingdom’s extensive experience in managing such funds,” he added.
Saudi Ministry of Investment Minister Khalid Al-Falih said Saudi investors are also eager to learn from the Philippines’ experience in financial management, and are particularly interested in the MIF.
“We want to connect you to key Saudi investors with impressive success stories to share and with the desire to continue building with international presence by investing with partners across the globe, the Philippines being a key one,” Al-Falih said.
Mulhan Albakree, executive general manager of the Public Investment Fund of the Kingdom of Saudi Arabia, and Bandar Al Hamali, the CEO of Jada, one of Saudi Arabia’s biggest investment companies, also expressed interest in the MIF.
In his departure statement before leaving for Saudi Arabia, the President highlighted the need to clarify earlier reports stating the MIF has been suspended, saying that he would continue to introduce the sovereign fund internationally.
President Marcos said the government is committed to pushing forward with the implementation of the MIF.
In Thursday’s meeting, Trade Secretary Alfredo Pascual made a pitch for increased economic relations with the Kingdom of Saudi Arabia, citing the Philippines’ abundant natural resources, a young and dynamic workforce and a domestic market of 117 million people.
“The Philippines is at the turning point of a transformative journey. As we champion economic inclusivity and propel ourselves forward, we are molding the Philippines into the prime investment destination,” Pascual said.
Finance Secretary Benjamin Diokno also encouraged business leaders in Saudi Arabia to consider the investment opportunities in the MIF and Islamic finance in the Philippines.
Diokno said that right at the beginning of President Marcos’ administration, the government set its sights on establishing institutions for long-term investments.
He said MIF is in line with the present administration’s 8-Point Socioeconomic Agenda for poverty reduction and Philippine Development Plan (PDP) 2023 to 2028 for deep economic and social transformation.
“To achieve this, Maharlika aims to attract capital from both domestic and global equity investors, including large funds here in the Middle East seeking to diversify its portfolio in fast-growing emerging markets like the Philippines,” Diokno said.
Investments in the fund will be used to speed up the implementation of the Philippines’ 197 high-impact infrastructure flagship projects worth about $153 billion.
Diokno also urged investors to tap into the diverse investment opportunities in the Philippines’ Islamic finance sector, saying it would drive economic growth and prosperity for all Filipinos.
The Bangko Sentral ng Pilipinas (BSP) has adopted a single regulatory framework for both Islamic and conventional banks, enabling them to thrive on a level playing field.
The Bureau of Internal Revenue (BIR) and Insurance Commission (IC) have also made efforts to support the development of Islamic finance by issuing policies on tax neutrality and takaful (Islamic insurance).
As of March 31, 2023, there are 217 cities and municipalities in Mindanao that have no banks, Diokno said, which presents an opportunity for investors to tap into this market while closing the financial inclusion gap.
Islamic banking in the country operates under the guidance of the Shari’ah Supervisory Board (SSB) which issues Shari’ah opinions on Islamic banking transactions and Shari’ah products, as well as financial institutions and other stakeholders as requested by the BSP.
The roundtable event was organized by the Ministry of Investment of Saudi Arabia and the Philippine Department of Trade and Industry (DTI). It was the first in a series of activities to be attended by the President at the Association of Southeast Asian Nations (ASEAN) – Gulf Cooperation Council (GCC) Summit from Oct. 19 to 21, 2023.
The ASEAN-GCC Summit is aimed at advancing mutual interest in areas such as energy security, food stability, and economic cooperation, among others. Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and the United Arab Emirates (UAE) are GCC nations that have established ties since 1990.
Diokno, who is with the President in Saudi Arabia, said the economic team was working closely with the Office of the President to improve the implementing rules and regulations (IRR) of the MIF, which was earlier suspended for further study.
“The MIF stands as a cornerstone for financing the infrastructure projects of President Ferdinand Marcos Jr.’s administration, which are crucial to achieving sustained and inclusive economic growth. We are steadfast in our commitment to seeing the Fund off and running before the end of 2023,” a statement released by the Department of Finance said.
Despite the IRR’s suspension, the President reiterated the administration’s commitment to having the fund operational before the year ends.
The President also said that the introduction of the MIF is an important aspect of the trip to Saudi Arabia.