Philippines to attract more investments with ASEAN deal – DTI
Philstar Global
16 October 2024
MANILA, Philippines — The Philippines has signed the protocol to amend the Association of Southeast Asian Nations (ASEAN) Comprehensive Investment Agreement (ACIA), which is expected to enable the country to attract more investments, particularly in manufacturing.
In an online briefing yesterday, acting Trade Secretary Cristina Roque who was in Laos for the 44th and 45th ASEAN Summits and Related Summits last week, said the Philippines has just signed the fifth protocol to amend the ACIA.
“This agreement makes it easier for investors to identify sectors open for investments in the Philippines, signaling a readiness to be a leader in the global economic and strategic manufacturing,” she said.
Trade Undersecretary Allan Gepty said the protocol presents a more stable and predictable business environment necessary to attract more investments in the Philippines.
He said the submission of the Schedule of Reservations pursuant to the fifth protocol would provide greater certainty and transparency in determining which sectors are open for investments as sectors with market access restrictions or limitations will be listed.
Gepty also said the protocol is in line with the country’s policy to pursue an advanced, purposive and forward-looking agreement.
“The ACIA also sends a strong signal to the investment community of the country’s readiness to serve as an investment hub in the region especially for smart and sustainable manufacturing,” said.
According to the ASEAN Investment Report 2024, foreign direct investments (FDI) in the Philippines declined by seven percent to $8.9 billion last year from $9.5 billion in 2022.
“Investment fell in most industries, with the exceptions of manufacturing and renewable energy,” the ASEAN said.
It said that European companies’ large wind power projects sustained investments in renewable energy in the country.
In terms of FDI source, it said companies based in Singapore invested significantly less in the Philippines, posting a drop to $183 million last year from $539 million in 2022.
On the other hand, FDI from Japanese firms rose by eight percent to $849 million.
“Divestment or scaling down of operations by some MNEs (multinational enterprises) in the face of challenges related to a value added tax rebate also contributed to the declining situation,” the ASEAN said.
As for ASEAN, FDI rose by less than one percent to $230 billion last year, against the backdrop of the global FDI slowdown.
“The region remained the largest recipient of FDI among developing-economy regions, underlining its resilience and rising investment attractiveness,” the ASEAN said.
To maintain the region’s FDI performance and to effectively navigate the post-2025 road ahead, the report emphasized the need for ASEAN to continue removing barriers to investment, as well as strengthening intra-regional investment.
It also highlighted the importance of enhancing regional production networks or supply chain development by promoting closer cooperation between special economic zones and supporting the expansion of micro, small and medium enterprises across the region.
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