The government has invited more Russian companies to invest in the Philippines, particularly in digital infrastructure, as it is in continuous pursuit in making the country a top investment destination in Asia.
Department of Trade and Industry (DTI) Undersecretary and Board of Investments (BOI) Managing Head Ceferino Rodolfo said the Philippines has access to overseas markets while it has recently enacted a law offering incentives to investors and undertaken important reforms in various areas.
“For instance, we know that in digital infrastructure, Russia has very fast and affordable internet connection averaging speeds of 200 MBPS (megabits per second) as well as very affordable service rates. In cashless payment, Russia is also among global leaders in this segment so please consider investing in the Philippines,” he said in a webinar.
Rodolfo expressed hope that the Philippines-Russia Joint Commission on Trade and Economic Cooperation (JCTEC) would pave the way for increased collaboration between the two countries in key industries such as electronics, aerospace, automotive, agriculture and agri-business, and information technology (IT) services and digital technologies.
The JCTEC is a mechanism to improve bilateral economic relations between the Philippines and Russia.
Rodolfo said investing and locating in the Philippines for manufacturing will provide Russia greater market access to more countries capitalizing on the country’s free trade agreements (FTAs) and preferential tariff agreements, and also greater access for sourcing of inputs.
He said investors will have access to Association of Southeast Asian Nations (ASEAN) and ASEAN-related FTAs, including the newly-signed Regional Comprehensive Economic Partnership (RCEP) agreement.
“And for those who would like to leverage lower cost of highly skilled labor, products you manufacture here, you can export to Russia or any EU (European Union) country at GSP (Generalised Scheme of Preferences) rates,” he added.
On the trade and export side, Rodolfo said that as part of global value chains, there are Philippine companies supporting Russian firms by providing important technology components as well as global services.
He also underscored the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law allowing the availment of income tax holiday from four to seven years depending on the level of technology and location of the project, and subsidies for key cost items.
“The income tax holiday will be followed by another 10 years of either enhanced deductions or special corporate income tax of 5 percent on gross income earned in lieu of all other taxes,” he added.
Rodolfo said President Rodrigo Duterte has also issued Executive Order (EO) No. 130 lifting the moratorium on granting mining permits, and EO 127 liberalizing access to satellite services which in turn opens opportunities for telecommunication companies to provide better internet service and access nationwide.
He said the Supreme Court also promulgated a decision for leveling the playing field between domestic and foreign construction companies, including Russian, in terms of the issuances of licenses.
“These are important reforms in areas where Russian companies have strong interest –in mining, telecoms and construction,” Rodolfo said.
“We would like to assure that the DTI-BOI as well as our Philippine Trade and Investment Center in Moscow remain steadfast in our pursuit of further improving the country’s investment climate by making this more conducive to businesses,” he added.