The Department of Trade and Industry (DTI) has invited Hong Kong companies to expand or set up shop here to ride on the Philippine expected recovery this year, as it strengthens trade and investment ties with other countries.
“We believe that the continued gradual and calibrated reopening of the Philippine economy, together with the country’s rollout of vaccination, is keeping us on track towards a V-shape recovery. We are already seeing some signs of recovery with respect to our GDP (gross domestic product) growth, record investment, and export growth rates that also led to about 72 percent growth last April, even higher than the 2019 pre-pandemic levels,” DTI Secretary Ramon Lopez said in a virtual forum.
Lopez said the game-changing Corporate Recovery and Tax Incentives for Enterprises (CREATE) law will make the investment climate in the Philippines significantly more attractive.
He cited the continued rollout of the government’s massive “Build, Build, Build” infrastructure program, and the implementation of streamlining and digitalization in government services to facilitate ease of doing business in the country.
“These are just a few of the many reasons why (the) Philippines is an ideal complement to Hong Kong businesses that planned to expand their R&D (research and development) activities, manufacturing activities, and IT (information technology) and business process management activities. Just to note we have a lot of companies with Hong Kong equity doing business in the Philippines,” he said.
Lopez said the Philippines has preferential access in major markets through the free trade agreements (FTAs), including European Union’s Generalized Scheme of Preferences Plus (GSP+) and the United States’ GSP program which is under discussion for renewal.
The government has also submitted its interest to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which will expand Philippine trade ties creating more opportunities to enhance competitiveness and market access for companies to the country, he added.
The CPTPP is a free trade deal of 11 member economies of the Asia-Pacific Economic Cooperation (APEC).
“We would like to point out that the Philippines can be a strategic hub in the Asia Pacific for hyperscalers. We would like to invite you to look at the Philippines to either co-locate or put up data centers here leveraging on our large population and propensity to consume data, foreign content, and cloud services. We also have the necessary infrastructure as well as the regulatory environment to attract hyperscalers,” Lopez said.
He assured Hong Kong companies that the DTI, through the Board of Investments (BOI), and the Philippine Trade and Investment Center based in Hong Kong will assist them to facilitate their business interest.
The Trade chief said Hong Kong is the country’s fourth largest trading partner, fourth biggest export market, 11th import supplier, and 16th investment source in 2020.
Edward Yau, Secretary for Commerce and Economic Development of Hong Kong SAR government, said mainland China and Hong Kong constitute more than a quarter of the Philippine exports, surpassing the US and Japan.
“I would say that the relationship between Hong Kong and the Philippines is not just strong, but it also has a lot of potential to grow. (In the) global picture, both Hong Kong and the Philippines are at the center of the global trade because of geographical location, because (both) believe in free trade and also the robust economy that we both share,” he said.
Yau said the fight against the coronavirus opens up business opportunities in services and trade related to public health and pandemic containment.
Steve Chuang, deputy chairman of Federation of Hong Kong Industries, said their members found that 60 percent of the Philippine exports are electronics industries.
“Among these exports, 75 percent are semiconductor and the semiconductor-related business so you can see that for electronic business, the Philippines is a mature area to do business and it is good they have a (stable) supply chain which is very good for
electronic manufacturing companies,” he said.
Jesus Varela, Director General of International Chamber of Commerce Philippines, said the digital sphere presents opportunities as the coronavirus accelerated digitalization.
“The sale of smartphones, laptops and computers was never so brisk in the first months of the pandemic and in the period of April to May, there were about at least 200,000 new websites and platforms created and suddenly social media was inundated with all kinds of goods to sell and services to offer. But by and large, we are the winners wherein the healthcare and pharmaceuticals industry that was in the frontline in the battle versus Covid and the uncertainty of when the lockdowns end has benefited the food manufacturers,” he said.
Varela said other winners are the telecommunications and broadband service amid the work-from-home arrangements and would service the household or businesses whether for entertainment, education or professional use.