Business leaders, entrepreneurs and innovators in Asia and the Philippines; my colleagues from the government; ladies and gentlemen, good day to you all! I hope everyone is keeping themselves safe and healthy during this time.

First, allow me to thank the organizers of this event – the Philippine Board of Investments, for this opportunity to join you today albeit virtually to provide you with updates on our strong trade and investment relations with Asia, as well as on our strategies and programs for continuous post-pandemic recovery.

Just like other economies, the Philippines was greatly affected by the pandemic. But while this disrupted our growth momentum, we are already seeing signs of recovery.

For instance, the Philippines’ total merchandise trade for the first to third quarter of 2021 amounted to USD140.55 billion, up by 25.1% from USD112.34-B recorded in the first to third quarter 2020. Total exports grew by 18.0% to USD55.68-B in the first to third quarter 2021. While total imports increased by 30.3% to USD84.87-B in the first to third quarter 2021, as economic activities rebounded, which required capital and intermediate goods.

This demonstrates, among other factors, the strong and stable Philippine economy and the resilient nature of the Filipinos – the main drivers of the country’s success. We are also glad to note that we have our international partners working with us to build back a better Philippines. The Asian region, in particular, has always been our strongest and largest partner in trade and investments.

Despite the economic disruptions brought about by the pandemic, Asia continues to be our top trading partner.

Based on the list of our top 20 trading partners from January to September this year, 12 are from Asia with a cumulative trade value of USD104.5 billion or 74.3% share of our country’s total trade. This posted a 26.3% increase from the same period in 2020.

From the same list, our exports to Asian countries amounted to USD37.5 billion or 67.3% of the total exports for the first three quarters of 2021. This recorded a 15.2% growth from the recorded USD32.5-B for the comparable period of 2020. Likewise, our imports from our Asian partners increased by 33.4% to USD67.0-B, with a sizeable share of almost 79.0%.

I would also like to highlight that during the pandemic period, the Philippines did not impose import/export restrictions. In fact, the importation of health equipment and supplies deemed critical or needed to address the COVID-19 public health emergency was given exemption from duties, taxes, and fees. Some import requirements were also streamlined. Particularly, the tariff rates and other import licensing requirements were even removed or adjusted for other products and commodities.

Our Asian neighbors have truly played a huge role as we tide over the effects of the COVID-19 pandemic. Our top five trading partners in Asia (per merchandise trade) alone – namely China, Japan, Hong Kong, Singapore, and Thailand, recorded a total of USD70.8 billion trade value, which already comprised half of the country’s total external trade in goods for the first three semesters of 2021.

On the investment side, foreign investors continue to stand by the Philippines and invest in mid- to long-term strategic projects even in the middle of a health crisis. Cumulative foreign direct investments (FDI) as of September posted at USD7.3-B.

This is 43.8% higher than the USD5.1-B recorded from January to September of last year, and even higher by 24.2% over pre-pandemic 2019 FDI levels, once again signifying real growth.

It is also noteworthy to emphasize that since 2016, the Philippines has risen from 6th to 4th rank, among our fellow ASEAN countries for FDI inflows. We value our investors and provide them with assistance in resolving different issues, concerns, and queries. We have ensured that the movement of cargo and people remain unhampered during the pandemic; even at the height of lockdowns last year and this year we fast-tracked the release of permits and/or licenses; and issued IATF IDs for DTI- covered enterprises. We assisted foreign manufacturers and exporters at the height of the lockdowns, enabling them to continue their factory operations, even helping them with transportation for their employees. We also facilitated travel ban exemptions for personnel essential to their operations.

As we continue to work towards the safe re-opening of the economy, the way forward for us is to build back better and to stay the course to have a better future for our country. Our goal is for Filipinos to have a modern, dynamic, and responsible Philippines.

To maximize our gaining momentum, we have embarked on a vision toward stronger and sustained economic recovery anchored on a strategy called REBUILD. REBUILD stands for “Revitalizing Businesses, Investments, Livelihoods, and Domestic Demand”— revitalizing consumption to boost demand, and empowering production capacities such as those in agriculture, industry, and services to meet the recovery in demand. This creates more investments, jobs, and income, creating a virtuous cycle of sustained and growing economic activity with strong domestic linkages.

On the demand side, it starts with government support via economic stimulus to keep jobs. This is achieved through our C-I-G-X (minus) M strategy which you can see on our slides as flashed. Specifically, this strategy pertains to encouraging strengthened consumer expenditure, continuously attracting investments, increasing government expenditure (like the Build, Build, Build Program), further boosting our exports, and managing imports.

On the supply side, we seek to enhance production capacities in the agriculture, industry, and services sector to fulfill the demand side growth and help build our export competitiveness and manage imports. This is important to attract more production activities and create a better business environment for investments.

To ensure continuity of business operations, our government had enacted various initiatives and reforms. One of these include our government-wide response to President Rodrigo Roa Duterte’s prime directive to enhance Ease of Doing Business through streamlining and automation.

The Ease of Doing Business Act of 2018 was established to eliminate overregulation to promote efficiency and government processes. In line with this, the Central Business Portal was launched which serves as a platform for citizens and business owners to access forms and requirements for business registration. This is on top of the existing GOV.PH site which is a single window uniting all web-based government content and services. All these initiatives aim to reduce processing time for government transactions, permits, and licenses.

Furthermore, with the Department of Trade and Industry’s Digital Transformation Initiatives, our critical services are made accessible online. These include services for Business Name registration which can be done online in 8 minutes, issuance of Import Commodity Clearance (ICC) or of Philippine Standard (PS) License, or license renewal through the Philippine Contractors Accreditation Board (PCAB).

To further facilitate ease of doing business, we have expanded the provision of internet services through inclusive access to satellite services. Executive Order No. 127 allows value-added service (VAS) providers and internet service providers (ISPs) registered with the National Telecommunications Commission to have direct access to all satellite systems. This enables them to build and operate broadband facilities that offer internet services.

The enhanced interconnection now allows private sector employees to work from alternative workplaces with the use of current technology and telecommunications. The Telecommuting Act, also referred to as Work from Home Law, seeks to protect the rights and welfare of workers in light of new and alternative avenues enabled by the latest communications technologies that allow employees to perform their work from their homes.

As our economy recovers, we are confident of reviving our pre-pandemic growth. To this end, we are facilitating greater trade and investment in the country by continuously pursuing reforms to foster a better business environment. That’s why we have realized the game-changing Corporate Recovery and Tax Incentives for Enterprises, more popularly known as the CREATE Act.

Making the investment climate in the Philippines significantly more attractive, the CREATE Act rationalizes, modernizes, and offers more relevant incentives to investors. This reduces the Corporate Income Tax (or CIT) rate from 30% to 25% for large corporations and down to 20% for micro, small, and medium enterprises (MSMEs).

CREATE likewise improves the investment incentives regime with longer income tax holidays and special corporate income tax rates for eligible projects. Meanwhile, under the Strategic Investment Priorities Plan (SIPP) under CREATE, we have identified industries for the grant of incentives to attract high-value, high-tech projects that will create more jobs and further boost the Philippines’ competitiveness in the global market.

The length of incentives that would be offered to corporations or investors will depend on their tier classification based on their levels of technology and location, especially those far from urban centers.

We likewise support the advancement of various reforms that will ease foreign ownership restrictions, through legislation such as the Retail Trade Liberalization Act (now for signature of the President), the Foreign Investment Act that just passed the bicameral committee and the Public Service Act (PSA) which is undergoing deliberation at the Senate plenary. The latter is vital to allowing greater competition in sectors such as telecommunication, which will result in better interconnectivity and telco services.

Before I end my message, I would like to emphasize that:

Firstly, while the Philippines indeed experienced its largest contraction in history in 2020, the country, on the other hand, posted the strongest rebound in the 3rd quarter of 2021, with 7.1% growth , the fastest in the Southeast Asian region. The YTD September growth is now 4.9% making the 5.5% full year projection within striking distance. Projection for 2022 is even stronger as the country is expected to continue further reopening and easing of border controls as we reach greater population immunity through vaccination and COVID treatments. There is a clear trajectory towards recovery.

Secondly, with the CREATE Act, we are in the position to offer highly competitive incentives that will sustain and help you maximize financial returns from developing a local supply chain network.

Third—Despite the Philippines nearing its forthcoming national election – signaling a change in the administration, rest assured that the DTI will remain to be a pillar that will continue with game-changing reforms and provide the assistance needed by businesses and investments to continuously grow and prosper. This has been proven across many administrations.

And finally, we encourage you to trust that the Philippine government will continue to improve/innovate its business climate through ushering in new, innovative, and long-term strategic policy reforms and programs that will make it easier to do business and further encourage your investments in the country.

We are ready to work with you in positioning the Philippines as an ideal business destination in the New Normal. Allow us to Make it Happen for you in the Philippines.

Maraming salamat po at mabuhay tayong lahat!

Date of Release: 16 December 2021