Philippine flags are displayed along the streets on June 3rd. — PHILIPPINE STAR/EDD GUMBAN
By Revin Mikhael D. Ochave, reporter
THE JOINT Foreign Chambers of the Philippines (JFC) now aims to generate US$128 billion in foreign direct investments (FDIs) in the Philippines by 2030.
“We set the goal at $50 billion (in 2020) and now it’s at $78 billion. So we increased it. Make it to a total of $128 billion by the end of 2030 (target),” Ebb Hinchliffe, executive director of the American Chamber of Commerce of the Philippines (AmCham), said during a news conference in Makati City on Thursday
According to Mr. Hinchliffe, the JFC is looking to increase investment in renewable energy, agriculture and manufacturing to meet its 2030 goal.
He said the goal will be achievable with the passage of legislation amending the Public Service Act (PSA), the Retail Trade Liberalization Act (RTLA) and the Foreign Investment Act (FIA), in particular.
The PSA Amendment Act allows foreigners to fully own public services such as railroads, telecommunications, shipping, airlines and subways.
“Energy will play a big role. I know there’s a lot of interest on the energy side, especially as we move from coal to renewables. I think the recently enacted Renewable Energy (RE) Implementing Rules and Regulations (IRR) are bigger than the PSA,” Mr Hinchliffe said.
The Department of Energy (DoE) last month issued a circular amending the IRR of the Renewable Energy Act of 2008 to allow 100% foreign capital in renewable energy projects. Section 19 of the IRR had previously restricted foreign ownership of RE projects to 40%.
The DoE previously said the circular now paves the way for foreigners and foreign-owned companies to explore, develop and exploit RE resources such as solar, wind, biomass, marine or tidal power in the country.
“Production is coming. I think there will be more investment in semiconductors and electronics. We’ve learned our lesson about chips. Farming is a tremendous opportunity, especially for technology and software to help farmers increase their productivity. infrastructure too. We have many infrastructure projects going on,” said Mr. Hinchliffe.
Regarding the projected job creation from these new investments, Mr Hincliffe said it may vary by industry.
“I think it’s about the same ratio. It depends on the industries. We’ve seen a lot of foreign investment in the Business Process Outsourcing (BPO) industry. And what we need now is an investment in the manufacturing sectors,” said Mr Hinchliffe.
Lars Wittig, President of the European Chamber of Commerce of the Philippines (ECCP), said recent economic reforms would also attract more investment to the Philippines.
“It should also be noted that the landmark reforms we have seen over the last 18 months affecting major investment industries and the most recent reforms also coming into force this month, the IRR related to sustainable energy, are leading to investment in Billions will come from Europe alone,” said Mr. Wittig.
“We believe a very experienced and competent economic team is in place and we trust that they will take appropriate action to address inflation, supply chain stalls and similar major challenges and headwinds to economic growth,” he added.
Australia-New Zealand Chamber of Commerce-Philippines, Inc. (ANZCHAM) vice president Bradley Norman said the JFC is optimistic about the economy’s recovery.
“We are optimistic about the Philippines’ performance and that optimism hasn’t changed… We still see the Philippine economy growing very strongly,” said Mr. Norman.
The gross domestic product (GDP) of the Philippines rose to 7.6% year-on-year in the third quarter, bringing nine-month GDP growth to 7.7%. Business executives are confident that GDP growth will exceed the 6.5-7.5% target for this year.
“It will encourage foreign direct investment and of course for employment. How much employment and how that employment relates to the FDI figure is really something you can’t calculate. We are very confident that the Philippines is moving in the right direction,” he added.
Meanwhile, several JFC members said they were neutral on lawmakers’ proposal to create a sovereign wealth fund called the Maharlika Investments Fund (MIF).
Mr Wittig said that the JFC was monitoring the fund’s developments, adding that it was awaiting further details on the proposal.
“(We are) neutral for now. We monitor it. we learn more We don’t have many details yet. It’s a big problem with a few details on the table,” said Mr. Wittig.
Mr Norman added that ANZCHAM supports the proposed creation of the MIF if it would spur more opportunities for the mining industry.
“From our perspective, we’re very supportive of mining, and if creating a sovereign wealth fund would create more opportunities for mining, then we’d look at that,” said Mr. Norman.
Mr Hinchliffe added that he was still unsure of the significance of the proposed sovereign wealth fund.
“I don’t know how necessary it is in the Philippines or how it’s going to work,” Mr Hinchliffe said.
On Tuesday, the House Banking Committee approved “in principle” House Bill 6398 creating the sovereign wealth fund.
Sovereign wealth funds are typically financed by proceeds from commodity exports such as oil.
JFC members include AmCham, ANZCHAM, ECCP, Canadian Chamber of Commerce of the Philippines, Japanese Chamber of Commerce of the Philippines, Korean Chamber of Commerce Philippines, and the Philippine Association of Multinational Companies Regional Headquarters, Inc.